Disturbing Non-Performing Asset (NPA) in Priority Sector and Non-Priority Sector Lending (NPSL) Between Public Sector and Private Sector Bank

The Indian banking industry faces an enormous issue in the form of Non-Performing Assets (NPA). Though NPAs are rampant in the Indian banking industry, particularly in Indian public sector banks, it is also the main reason for their obligatory lending to the priority sector. Banks have huge scope to extend credit to both the priority and non-priority sectors as the NPAs have not yet reached such magnitude that can seriously harm the efficiency of a bank. The problem of the NPAs is of great interest to academics and policymakers. The purpose of this paper is to check whether NPAs in Indian commercial banking has reached a critical stage.