A COMPARATIVE STUDY ON TREND ANALYSIS OF NON-PERFORMING ASSETS AT SBI AND ICICI BANK IN INIDA

Abstract

Non-Performing Assets (NPAs) have emerged as a critical concern for the banking sector in India, affecting both public and private sector banks. This study presents a comparative analysis of NPAs at State Bank of India (SBI), the largest public sector bank, and ICICI Bank, one of India's leading private sector banks. The paper aims to explore and analyze the trends in NPAs for both banks over the past decade, examining key metrics such as gross NPA ratios, net NPA ratios, provision coverage ratios, and recovery rates. It delves into the underlying factors contributing to NPAs, including sectoral exposure, economic conditions, and risk management strategies. The study also evaluates the effectiveness of regulatory frameworks, such as the Insolvency and Bankruptcy Code (IBC) and RBI guidelines, in managing NPAs. The findings reveal that while both banks have faced challenges with NPAs, SBI, due to its larger exposure to riskier sectors, has witnessed higher NPA levels compared to ICICI Bank. However, SBI’s improved provision coverage ratio and focus on recovery mechanisms indicate a concerted effort to manage its asset quality. In contrast, ICICI Bank's diversification into retail lending and use of advanced risk management techniques have helped in maintaining relatively lower NPA levels. This comparative analysis provides valuable insights into how both banks manage their asset quality and highlights the broader implications for the Indian banking system. The study concludes with recommendations for both banks to further enhance their NPA management strategies and improve the financial stability of the Indian banking sector.