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Role of technology in reduction of non-performing assets (NPAs) in Indian banking sector (with special focus on global trends)

Pratapsinh Chauhan*, Shaleen Srivastava

Indian banking sector has been facing serious problems of rising Non-Performing Assets (NPAs) in recent times. NPAs beyond a certain level are a cause for concern for everyone involved because credit is essential for economic growth and NPAs affect the smooth flow of credit. When a loan becomes nonperforming, it directly affects the profitability, since higher NPAs require higher provisioning, which means a large part of the profits need to be kept aside as provision against bad loans. AI (Artificial Intelligence) technologies on the other hand, have matured now and are ready to be simple-mented. They offer an exciting opportunity to establish new operational models and based on insights from Data analytics, it can provide scope to identify gaps in current financial sector offerings; uncovering opportunities and advantages that can be seamlessly helpful to address the problem of rising NPAs in Indian Banking Sector.