The investigation of the effects of increasing non-performing assets on the Indian economy prior to COVID-19

Strong banking sector is one of the most significant prerequisite of strong economy because it channels the savings into the investment. The economy of a country
depends upon sound banking system in the country. Any crisis in the banking sector it directly affect the economy of the country. For economic development of a
country we need a sound banking system but now a days banking industry are negatively affecting to the society because of the rising of Non- Performing Asset (NPAs)
.Non Performing Asset means any asset which stops giving returns to its investors for a specified period of time.This bad performance is not a good sign and can result
in crashing of banks as happened in the sub-prime crisis of 2008 in the United States of America. Also the NPA problem in India is worst when comparing
other emerging BRICS Economics. For the last a few years the NPA of banks is increasing tremendously. NPAs in public sector banks increased by about Rs 10.2 lakh
crore between March 2015-2018 from Rs 3,23,464 crore, as on March 31, 2015, to Rs 10,35,528 crore, as on March 31, 2018. Several steps have been undertaken by the
RBI and the government of India to curb the increasing NPA of Indian banks, but these steps have not been proved to besuccessful.
Now a day the increasing NPA has become the burning issue in banking sector. If we are not controlled this situation it impact on Banks, Industries and Economy of the
country. Higher NPA ratio trembles the confidence of investors, depositors, lenders etc. It also causes poor recycling of funds, which in turn will have deleterious effect
on the deployment of credit. The non-recovery of loans effects not only further availability of credit but also financial soundness of the banks thissituation causes for the
economic recession in the country. To overcome this problem RBI and Banks should coordinate each other and develop the rules and regulation for lending and
recovering of loans should be improved. Then only the NPAs would reduce in the country.