CONCLUSION
The analysis concludes that there is a diminishing trend in the ratios of non-performing assets. There is a high degree of negative correlation between NPA Ratios with ROA. Regression model has also repeated the results and that there can be an enhancement in profitability of the banks if the NPAs has a continuous decreasing trend.
Consequently, an inverse relationship among profitability and non-performing assets revealed the fact that the bank can have an increasing trend of profitability only by the effective decline in the NPAs. The assessment would help to improve the assets quality of banks, so that, provisioning requirement would automatically come down and it adds to the profits directly which leads to increase in the overall performance of the banks. It is important to manage the level of NPAs for Owners and Depositors also as they can face many problems due to augmented non-performing assets, even they cannot receive their aropriate return on their capital. NPA may spill over the banking system and contract the money stock, which may lead to economic contraction and affect its liquidity and profitability. Though total elimination of NPAs is not possible in banking business as elements of risk is an inseparable ingredient but by effective management it can be minimized.
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