Assessing Financial Health of Indian Private Banking Sector
- Divyakumar Nagralawala, Student, Faculty of Management, GLS University, Ahmedabad
- Dr. Avni Patel, Assistant Professor, Faculty of Management, GLS University, Ahmedabad
Abstract:
Banking Sector plays a vital role in the development of country’s economy. The best indicator for the health of the banking industry is its level of Non-performing assets (NPA). It reflects the performance of banks. NPAs in the banking sector have become a major concern for Indian economy. NPAs adversely affect the profitability, liquidity and solvency of the bank. This paper is analysing NPA level and assessing financial health of Indian private banking sector. This paper investigates the growth of NPA and analyse the relation between NPA and profitability of the bank. This study also evaluates the financial health of the bank using Altman z score model. The study is analytical in nature and secondary data are collected. According to the Altman Z score model this study shows that all selected banks are in safe zone.
Keywords:
Banking, NPA, Altman Z score model, Private sector banks