This paper is withdrawn in Volume-6, Issue-5, 2020
Area
Banking
Author
Sambhav Maheshwari
Org/Univ
Chirec Public School, Hyderabad, Telangana, India
Sub. Date
29 September, 2020
Paper ID
V6I5-1265
Publisher
Keywords
Non-Performing Assets, Economic Growth, Asset Quality, Credit Availability, Spearman's Rank Correlation, Commercial Banks

Abstract

Commercial banks in an economy are catalysts in economic growth because they convert accumulated savings into productive lending. They are exposed to a variety of risks when they do so and since credit is an essential determinant for economic growth, a high level of NPAs may result in slower economic growth and prospects. An understanding of the relationship between NPAs and economic growth is important to analyse the role of commercial banks in an economy. This will also help us determine the strength of the relationship between the two factors and whether or not either is a dominant determinant for the other. Thus, this study provides a comparative analysis of the relationship between GDP growth rate and the Gross NPA ratio in all banks across the country during a 19-year period commencing from 2000-01 to 2019-20.