Year: 2026 | Month: March | Volume: 13 | Issue: 3 | Pages: 198-217
DOI: https://doi.org/10.52403/ijrr.20260324
Non-Performing Assets in Public and Private Sector Banks in Arunachal Pradesh: An Empirical Study
Karbar Riba1, Debajyoti Sarkar2
1Research Scholar, Department Commerce, Rajiv Gandhi University, Arunachal Pradesh, India
2Research Scholar, Department of Commerce, Rajiv Gandhi University, Arunachal Pradesh, India
Corresponding Author: Debajyoti Sarkar
ABSTRACT
Non-Performing Assets (NPAs) constitute a major challenge to the financial soundness, profitability, and operational efficiency of the banking sector in India. The persistence of NPAs adversely affects banks’ asset quality, constrains credit expansion, and poses risks to overall financial stability. This study presents an empirical examination of the nature and extent of NPAs in public sector and private sector banks operating in Arunachal Pradesh, a geographically and economically distinctive state in the North-Eastern region of the country. The research adopts a comparative analytical perspective to assess variations in NPA levels, recovery performance, and credit appraisal practices across the two categories of banks. The findings indicate significant differences in asset quality and NPA management between public and private sector banks. Public sector banks are observed to exhibit relatively higher levels of NPAs, which may be attributed to their broader developmental responsibilities, higher exposure to priority sector lending, and structural limitations in credit monitoring and recovery mechanisms. In contrast, private sector banks demonstrate comparatively stronger credit appraisal standards and more effective post-sanction monitoring, resulting in better asset quality outcomes. The study also emphasises the influence of institutional and operational factors on the accumulation of NPAs. The analysis highlights the necessity of strengthening credit risk management frameworks, particularly within public sector banks, through improved appraisal procedures, enhanced monitoring systems, and timely recovery strategies. Given the unique socio-economic and geographical context of Arunachal Pradesh, the study underscores the importance of region-specific banking approaches to ensure sustainable credit growth, financial inclusion, and long-term stability of the banking system.
Keywords: Non-Performing Assets, Public Sector Banks, Private Sector Banks, Credit Risk Management, Banking Performance.
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