NPA Analysis of Public Sector Banks using Inferential Statistical Tools and Ranking Analysis for the Preceding Five Financial Years

Abstract

Purpose: The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The purpose of this study is an effort to look into the consistency of all Indian public sector banks across five preceding financial years and among the banks using inferential statistical tools and ranking analysis cutting across 5 preceding financial years and cutting across all the public sector banks and thereby draw inferences about the Gross NPAs of all the Indian public sector banks.

Methodology: All the 12 public sector banks at present have been considered for the purpose of the study. The analysis is based on secondary data collected from the Reserve Bank of India website, money control and other concerned websites. The mean scores and Co-efficient of Variationhave been used as primary inferential statistical toolsand standard deviation as an ancillary tool. Further, refinement of the result is done by comparing the growth of gross NPAs cutting across the years under consideration also cutting across the all the banks under consideration.

Design/Analysis: The research is exploratory research and has employed secondary data for the purpose of analysis. The Population Size N=12(Total Number of Public Sector Banks at present) and sample size n=12 it implies that 100% of population is selected as samples.The methodology is that, Gross NPA ratio data from the Master Table is taken and analysis is done for all the banks year wise using mean score and standard deviation and subsequently calculating coefficient of variation. further ranking table is prepared for gross NPA ratio. subsequently the analysis is done using the between the banks in the same manner is done year wise and ranking is done.

Results: The research result highlighted that from 2020 to 2024 in a span of 5 financial years, pertaining to all the banks under consideration, the mean scores of Gross NPAs are coming down. therefore, it can be inferred that the NPA levels are decreasing in all the banks over a period of last 5 financial years, which is a good sign. The research reveals that from 2020 to 2024, in a span of 5 financial years, pertaining to all the banks under consideration, the Standard Deviation of Gross NPAs are coming down, therefore, it can be inferred that the Risk factor of NPAs are decreasing in all the banks over a period of last 5 financial years, which is a good sign. As far as individual banks are concerned banks like State Bank of India, Bank of Maharashtra and Punjab National Bank are the top performers in the effective management of Gross NPAs.

Originality/Value: The research is interesting as the study period follows the NPA management towards which by and large everyone are curious. There is no such previous study that has looked at the perspective inferential statistical tools and ranking analysis point of view. The research is valuable from two angles. Firstly, it brings to light the consistency of NPA management of the public sector banks cutting across 5 preceding financial years. Secondly, the analysis is done cutting across the different public sector banks also based on the secondary data which has not been used in any research so far.

Type of Paper: The research article is exploratory where in a serious effort is made to explore about the Gross NPA management of public sector banks in India.