Resolution of Non-performing Assets of Commercial Banks: The Evidence from Banker's Perspective in Indian Banking Sector. Issue 4 (December 2022)

• Record Type: Journal Article
• Authors: Chawla, Sonia; Rani, Seema
• Is Part Of: Indian economic journal. Volume 70:Issue 4(2022)
• Page Start: 635
• Page End: 654
• Publication Date: 2022-12
• Subjects: Non-performing assets -- factor analysis -- banker's perspective -- management of NPAs -- exploratory factor analysis -- confirmatory factor analysis; Economics -- Periodicals; India -- Economic conditions -- Periodicals; Economics; Economic history; India; Periodicals; 330.5
• DOI: 10.1177/00194662221118318
• Languages: English
• ISSNs: 0019-4662

Abstract

The present article draws on the banker's perspective and extracts some practical insights about the factors behind specific NPAs resolution strategies. Based on the thorough review of the perspective, conceptual and empirical literature, and using exploratory factor analysis (EFA), the study has identified 21 dimensions for 'management of NPAs'. The empirical analysis of these dimensions has extracted 7 factors for management to be significant. A structured questionnaire has been developed and data has been collected from officers in different banks in India, especially working in the credit department. The questionnaire has been empirically tested for reliability and validity using confirmatory factor analysis (CFA) and also Z-test for checking the significance of the explored and confirmed factors. The present research work offers pragmatic suggestions for banking regulators, on improving the asset quality of banks in India and also throws new insights on effective credit management in banks. JEL Codes: G01, G21, G32, E44