EFFECT OF LENDING PATTERN ON NPA IN INDIAN BANKS

Abstract

Lending is one of the key functions of banks apart from accepting deposits. Banks need to maintain balance between the financing to priority and non-priority sectors. But while maintaining this balance another critical variable non-performing asset has to be taken care properly. Higher the NPA, rising the risk of banks; in present paper the relationship among the lending in priority sector and NPA as well as non-priority sector and NPA has been investigated for both public as well as private sector banks. Public sector banks (PSB) are in good position of lending & NPAs of priority sector as well as Non-priority sector comparing to private sector bank Lending & NPAs.