Abstract

The Indian banking system struggles with the rising burden of non-performing loans (NPLs), impacting financial stability and growth. This study evaluates how bank-specific factors and macroeconomic indicators affect the profitability of top private sector banks listed on the National Stock Exchange (NSE) in India. Using Return on Assets (ROA) as a profitability measure, it analyses variables such as the NPA ratio, Net Interest Margin (NIM), operating profit, inflation rate, and interest rate. The study employs quarterly data from 2011-12 to 2021-22, using panel data methodology for robust analysis. Findings indicate that high NPA ratios and inflation negatively impact ROA, highlighting the need for effective NPL management and macroeconomic stability. This research informs policymakers and stakeholders on strategies for NPL resolution and economic stabilization, suggesting future studies to explore additional determinants with advanced methodologies.

Description