NPA prediction in banking sector: implications
NPA stands for Non Performing Assets. As it sounds, it covers the assets which do not earn any return. It’s commonly heard in banking terms. NPA in banks are usually loans that do not earn any income to the lender. They are not earning and also have other negative implications. The lender cannot carry it on the books, writing it as the bad debt will make it even worse. So, usually companies hold these assets with an intent that situation will change later, or the company will try to sell it to another company. As predicted, NPAs are highly problematic for financial institutions like banks because they depend on interest payments for their income. Prolonged phases of lockdowns have resulted in many banks facing issues related to NPAs. Consequently, NPA prediction becomes an essential part of their day to day banking process. Every nation, in fact, the whole world requires a strong banking sector to ensure a flourishing economy. Banking sector growing downwards can have a negati