WRITING SAMPLE

The Indian banking Sector has been facing serious problems of raising Non-performing Assets.
The NPAs growth has a direct on the profitability of banks. Non-performing assets are one of the
major concerns for scheduled commercial banks in India. The recommendations of Narsimhan
Committee and Verma Committee had taken few steps to solve the problem of old NPAs in the
balance sheet of banks. There seems to be no unanimity in the proper policies to be followed in
resolving the concerned problem. NPAs reflects directly in the performance of banks. There is a
direct relation between NPAs and high profitability with a large number of credit defaults that
affect the net-worth of the banks and also erodes the value of assets. It affects the liquidity and
profitability, in addition to incur threat on quality of assets and survival of banks. The incumbent
problem of NPAs doesn’t only affect the banking sector but also the whole economy. It is pertinent
to assert the fact that the high level of NPAs in Indian banks is nothing but a counter reflection of
the state of health of the industry & trade. It is necessary to surmount NPAs to improve the
financial health in the banking system. NPAs increases risk perception and thereby liquidity
positions of the bank. This paper attempts to first examine the level of NPAs in the banking sector
in India and then analyzing the causes for increasing NPAs. It also emphasis on the comparison of
the performance of public sector banks with the private sector banks also cases related to NPAs
and debt recovery in the present day scenario and the solutions ought to it. It also attempts to enlist
the challenges owing to different tribunals, legislations, enacted codes in devastating the problem
of non-performing assets. It encompasses the role of RBI in strengthening the problem of NPA
under the regime of different enacted legislations such as SARFAESI Act and Insolvency and
Bankruptcy Code (IBC).