A Detailed Study of Non-Performing Assets and Its Impact on Financial Performance of Commercial Banks

The primary activity of commercial banks is to accept deposits and to provide loans. The motive of Commercial banks is to earn profits by lending loans to the public and charging interest on the same. It makes profit on the spread i.e. the difference between the borrowing rate and lending rate. However when the borrower makes a default in the payment of the interest and the principal amount of the loan provided banks have to suffer. Such non-payment of interest and principal are treated as Non-performing assets. They adversely affect the financial performance of commercial banks. The aim of this research study is to evaluate the impact of NPA on financial performance of selected commercial banks. The data is collected from secondary data sources. The data sources include research articles, papers, journals and various websites. The collected data is analyzed utilizing different statistical tools and techniques.