Abstract:

The foundation of any nation's economy is its banking system. Because the funds placed in banks belong to the countries people, excessive losses to banks have an impact on every person living there. Bad loans and fraud are the main causes of NPAs that banks experience. The figures provided by the RBI also demonstrate that escalating bank frauds and the costs that result from them are one of the main obstacles to the development of banking in India. As a result, banks' loan books have become of worse quality, which has a negative impact on their financial performance. The amount of bad loans in many banks has reached dangerous proportions, even endangering their survival, and the Reserve Bank of India has placed them under Prompt Corrective Action. The current study spanning a period of ten years from FY 2012 to 2021 is intended to analyse the impact of the wilful default on selected financial parameters such as efficiency, liquidity, profitability and solvency of public and private sector banks. Nine different rations have been used under these broad parameters in the study. The data has been obtained from CIBIL Website and RBI. The study has used descriptive statistics, trend, correlation and regression analysis. The research reveals that there is a significant relationship between wilful default and financial performance of public sector banks. The study suggests that banks should exercise caution when making large loans.

Keywords:

Wilful Default, Public Sector Banks and Private Sector Banks.

How to Cite:

P. Nithyakirrthy, R. Shanthi, Puja Pawar and Aishah Aldowish. Impact of Wilflful Default on Financial Performance of Public and Private Sector Banks in India. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a186/