Resolution of Non-performing Assets of Commercial Banks: The Evidence from Banker’s Perspective in Indian Banking Sector

The Indian economic journal : the quarterly journal of the Indian Economic Association Pub Date : 2022-08-31 DOI:10.1177/00194662221118318

Sonia Chawla, S. Rani

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Abstract

The present article draws on the banker’s perspective and extracts some practical insights about the factors behind specific NPAs resolution strategies. Based on the thorough review of the perspective, conceptual and empirical literature, and using exploratory factor analysis (EFA), the study has identified 21 dimensions for ‘management of NPAs’. The empirical analysis of these dimensions has extracted 7 factors for management to be significant. A structured questionnaire has been developed and data has been collected from officers in different banks in India, especially working in the credit department. The questionnaire has been empirically tested for reliability and validity using confirmatory factor analysis (CFA) and also Z-test for checking the significance of the explored and confirmed factors. The present research work offers pragmatic suggestions for banking regulators, on improving the asset quality of banks in India and also throws new insights on effective credit management in banks. JEL Codes: G01, G21, G32, E44

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商业银行不良资产处置:来自印度银行业银行家视角的证据

本文借鉴了银行家的观点，并对具体的不良资产处置策略背后的因素提取了一些实用的见解。基于对视角、概念和实证文献的全面回顾，并使用探索性因素分析（EFA），该研究确定了“NPA管理”的21个维度。通过对这些维度的实证分析，提取了7个具有显著管理意义的因素。已经编制了一份结构化问卷，并从印度不同银行的官员那里收集了数据，尤其是在信贷部门工作的官员。使用验证性因素分析（CFA）和Z检验对问卷的信度和有效性进行了实证检验，以检验探索和确认的因素的显著性。目前的研究工作为银行监管机构提高印度银行的资产质量提供了务实的建议，也为银行有效的信贷管理提供了新的见解。JEL代码：G01、G21、G32、E44

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The Indian economic journal : the quarterly journal of the Indian Economic Association

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