Impact of NPA’S on the earnings of SBI and its associates

Abstract

Indian banking system has undergone a tremendous change since liberalization in the year 1991. State Bank of India and its Associates (now merged in SBI) are playing a very significant role in the Indian economy. State Bank of India is a bank having Associates and branches all over the world before merger. The main function of every bank is to accept deposits for the purpose of lending and earn profits with the help of this transaction. State Bank of India and its Associates are public banks and performing the same functions. Lending is main source of earning and lending constitutes customers which can be good and can be bad. Bad customers of a bank turn its assets into non performing assets. So in present research paper we will study the impact of Non Performing Assets on the earnings of the State of India and its Associate. We will use statistical tool like correlation in order to reveal the results. Data of 12 years i.e. March 2004-March 2015 is taken into consideration from the website of Reserve Bank of India. And results reveal that there is positive correlation between the two said factors.