Impact of Bank-Specific Determinants on Non-Performing Assets in Indian Public Sector Banks: An Empirical Analysis

Author(s)	Mr. Girish Mainrai, Prof. Dr. Sanjay Payasi
Country	India
Abstract	This study examines the impact of bank-specific determinants, namely Capital Adequacy Ratio (CAR), Cost-to-Income Ratio (CIR), Net Interest Margin (NIM), Return on Assets (ROA), and Credit-to-Deposit Ratio (C/D), on Gross Non-Performing Assets (GNPA) in Indian Public Sector Banks (PSBs) over the period FY 2020-2021 to FY 2023-2024. Using a robust multivariate regression model on panel data, the analysis highlights key relationships between these indicators and NPA levels. The results demonstrate that NIM and C/D ratio have a significant negative influence on GNPA, indicating that higher profitability and balanced credit deployment play crucial roles in reducing NPAs. While CAR, CIR, and ROA exhibit negative relationships with GNPA, their impacts are statistically insignificant in this model. The findings offer valuable insights for policymakers and bank management, emphasizing the need for strategic measures to enhance profitability, optimize operational efficiency, and balance credit growth. This study concludes with actionable recommendations to ensure sustainable financial stability and effective NPA management in PSBs.
Keywords	Non-Performing Assets, Capital Adequacy Ratio, Cost-to-Income Ratio, Net Interest Margin, Return on Assets, Credit-to-Deposit Ratio, Indian Public Sector Banks, Banking Efficiency.
Published In	Volume 8, Issue 4, July-August 2026
Published On	2026-07-24

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