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Abstract
A well-developed and financially strong banking sector is the backbone of the economic development of any nation. Banks mobilize the savingsof the public by accepting deposits and disburse credit according to socio-economic priorities of the country. Banks and financial institutions provide financial assistance in the form of advances to agricultural and industrial units, MSMEs and service sector, to run their businesses efficiently and to contribute in the economic development. It took almost 3-4 years for banks to come out of the 2008 financial crisis that happened in the world economy and still, banks are facing issues like non-performing assets, which not only reduced the profitability of banks but also affect their smooth operations and goodwill. A drastic increase in NPAs is happening in public sector banks of India. Public sector banks are ruling the banking sector in concern of net worth, which is 70 percent of the banking system of India. In the mid of September 2018 gross NPAs of SCBs crosses the limit of nine lakh crores out of which 90% NPAs were in the public sector banks. State Bank of India and Punjab National Bank are leading in that. Although, Reserve Bank of India and banks themselves have taken numerous steps to solve the NPAs problem but it is still alarming in the Indian economy.