A Systematic Literature Review On Non-Performing Assets In Public Sector Banks

The banking sector is a significant element of any financial system, and non-performing assets (NPAs) represents a significant challenge within the system. Narsimhan committee introduced non-performing assets in 1991 on “Financial Sector Reforms”. This paper offers a comprehensive literature review covering the period from 2003 to 2023, with a focus on NPAs in the Indian banking system. It explains the definition, growth, composition, determinants, recovery channels, and management of NPAs. The research highlights various reasons for debt piling contributing to the upliftment of NPAs, including poor credit recovery systems, inadequate credit appraisal and monitoring, government policies, and wilful defaulters. Addition to this, it investigates the determinants of NPAs, such as bank-specific variables and macroeconomic factors. The problem of NPAs become a hinderance in the economic development of the country. The study also delves into recovery channels, including Debt Recovery Tribunals and the SARFAESI Act, proposed by researchers to mitigate NPAs. Through a systematic literature review, the paper highlights gaps in existing research and suggests future directions for exploring effective NPA management in Indian commercial banks.