Why public sector banks have higher NPA than private banks?

The study highlights that the primary causes of higher NPAs in PSBs are their liberal credit policies and loose terms and conditions of loans, deficiencies in the credit sanctions, and disbursements of loans.

Why public sector banks have higher NPA Upsc?

Reasons for rise in NPA in India During this period Banks especially Public sector banks lent extensively to corporate. This has affected their ability to pay back loans and is the most important reason behind increase in NPA of public sector banks.

Which bank has highest NPA percentage?

Among PSBs, State Bank of India (SBI) which accounts for the highest share at around 20\% of the gross NPAs of state-owned banks in Q3 FY21, reported the highest asset quality improvement, with a decline in bad loan to 4.8\%, followed by Punjab National Bank (PNB) accounting for around 16\% share which also posted lower …

Which public sector bank has lowest NPA?

Not one PSU bank in the top 5 lenders with lowest NPAs

• IndusInd Bank.
• ICICI Bank.
• Federal Bank.
• Kotak Mahindra Bank. Kotak Mahindra Bank, the third largest Indian private sector bank by market capitalisation, has seen net NPAs consistently below 1.5 per cent.

Why Indian banks have high NPA?

Reasons for the Rise in NPA levels From 2000-2008, the Indian economy was in a boom phase and banks, especially public sector banks, started lending extensively to companies. However, with the financial crisis in 2008-09, corporate profits decreased and the Government banned mining projects.

Which private bank has lowest NPA?

What is the percentage of NPA?

At the end of March 2021, the gross NPA ratio stood at 7.48 percent for the banking sector.

Why is NPA increasing?

Sick Industry growth made Banking NPA Rise The businesses of most of the corporates were adversely affected due to slowdown in the global economy following the financial crisis. Another major reason of rising NPA was the relaxed lending norms for corporate houses.