IMPACT OF SARFAESI ON NPA

Abstract

Commercial Banks are playing a very important role in the fiscal and lending systems. Banks are' unique' as they are the financial intermediaries which plays vital role to mobilize and distribute public savings to provide protection and saver return. The implementation of economic reforms provides more flexibility and independence to banks to improve their profitability, productivity and efficiency. Public Sector banks (PSBs) make a major contribution in every sector such as agriculture, various industries, trade, education, and infrastructure to develop the Indian economy.

Banks are providing loans to borrowers so that they can also improve their profitability, productivity and efficiency. But it’s very unfortunate that because of borrowers’ deliberate defaults, the increased number of NPA account holders are at the alarming rate. NPAs have impacted not only banks ' productivity and profitability, but also banks ' overall performance. Asset quality is a primary factor for measuring banks ' efficiency and overall functioning. 

Increasing number of NPAs is a major problem now, which actually affecting the economic growth of the country and reducing the economic strength of the banks. In this research paper an attempt has been done to examine the reasons responsible for NPAs and to analyze the role of different ad judicatory authorities who are part of banking system.