Non-performing assets of indian banking sector – a prediction

The successful movement of the Indian economy depends upon the smooth functioning of its banking sector. But in recent years, it has witnessed a big issue called Non-Performing Assets (NPAs) and it is becoming an incurable problem for the banking sectors. On the other side, the Indian banking sector has launched a concept called financial inclusion and thus to provide the banking services to the financially excluded people. But, this initiation is putting the additional financial risk on the banking sector in the form of mounting NPAs day by day. This kind of situation has to be tackled in an effective way by the banking sector for their future survival. With this backdrop, the present paper has made an attempt to identify the reasons for rising NPAs and to construct a valid methodology to foresee NPAs in the future. Thus, in this research, Multiple Linear Regression model has been constructed to forecast the amount of NPAs in 2020. This model was constructed based on the existing models used in the prediction and this model would help the Indian banking sector to tackle the NPAs problem in an effective manner.