Ranking the Higher Influencing Factors that Cause NPAs in Public Sector Banks in Karnataka Using Factor Analysis
Nemani Varalakshmi1, M. M. Shanmugapriya2

1Nemani Varalakshmi, Research Scholar, Department of Mathematics, Karpagam Academy of Higher Education, Coimbatore, India.
2M M Shanmugapriya, Department of Mathematics, Karpagam Academy of Higher Education, Coimbatore, India.

Manuscript received on 02 June 2019 | Revised Manuscript received on 10 June 2019 | Manuscript published on 30 June 2019 | PP: 2900-2908 | Volume-8 Issue-8, June 2019 | Retrieval Number: H7276068819/19©BEIESP
Open Access | Ethics and Policies | Cite | Mendeley | Indexing and Abstracting
© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Abstract: The financial health of the banks regarding the performance and profitability speaks volumes of the economic growth of our Country. The banking system is considered as the backbone of overall growth of the country. The Indian banking industry has seen significant changes since the process of liberalization, but the presence of Non-Performing Assets has affected the overall performance and profitability of the banks. NPAs have become a huge concern and burden on the Nation’s Economic growth. The banking sector needs to take measures to control the menace of NPAs. The reduction of NPAs assumes the highest importance. This paper explores and explains the ranking of the influencing factors that lead to the accumulation of Non-Performing Assets in Public sector Banks. The study shows the three significant areas, namely borrowers, banks and causes, and emphasizes the influencing factors of NPAs in Public sector banks using statistical tests like correlation analysis and factor analysis. The major influencing factors from the statistical study may be useful to reduce the NPAs which will improve the overall productivity and profitability of the banks.
Keyword: Non-Performing Assets, Profitability, Public sector banks, Factor analysis, Economic Development.
Scope of the Article: Structural Reliability Analysis.