Measuring Npa Levels and Its Impact on Profitability

Abstract

Purpose: This study aims to analyze the situations of NPA levels and their impact on the profitability of HDFC Bank and ICICI Bank. Approach/Methodology/Design: The profitability data of the two banks, HDFC Bank and ICICI Bank, has been taken for the years 2018 to 2022. The research is secondary in nature and the data collection is done by way of annual reports. For data analysis, the independent samples t-test is applied in the study. Findings: The Gross NPA levels and Net NPA levels have shown significant differences between the two banks under study. This suggests the NPA levels of both banks are unequal. The return on assets was also found significantly different in both banks. Originality/value: This study focuses on the aspect of efficiency of private sector banks in accordance with NPA levels. The NPA levels and management of NPA are found to be more effective in tackling NPA situations but the comparative study of NPA will reflect the situations of NPA in private sector banks as well.