Proceedings of The Second Pan-IIM World Management Conference 2014 pp.1-5 © Indian Institute of Management Kozhikode * Corresponding Author: Vinay Kandpal (vkandpal@ddn.upes.ac.in) An Empirical Analysis of Non-performing Assets (NPA) in North India’s Banks Vinay Kandpal 1* , P.C. Kavidayal 2 1 Department of Accounting & Finance, University of Petroleum 2 Department of Management of Studies, Abstract The paper analyzes the NPA in public and private sector banks in the northern states of India. It attempts to identify and analyze the reasons for NPA, hindrances in its effective monitoring and suggest remedial measures. The branches of banks selected for the study have a high proportion of NPA and are the top banks in this region. The judgement sampling method was used to collect data from the middle - level managers who have an understanding of the subject and its impact. The research considered a set of 50 variables and used the necessary measures to analyze them. The statistical tool called SPSS was used to run a factor analysis test. The study found that some of the factors that have an effect on NPA are the type of loan, credit- worthy borrowers, the availability of acceptable collateral, lack of supervision and follow-up, deiciency of the credit appraisal standard, death of a key person and business failure/lack of entrepreneurial knowledge on the borrower’s part. Keywords NPA, Proitability, Public sector banks, Private sector banks Introduction The growth of NPA in the Indian banking sector has been a matter for serious concern. This problem has also affected Indian economy. The socio-political developments have also contributed immensely to the increase. NPAs are key to judging the performance and eficient working of banks. The level of NPAs also shows the inancial stability of the banking sector. This research paper tries to identify and analyze the reasons which are responsible for NPA and their ineffective monitoring. It also suggests remedial measures to reduce NPA. Objective of the Study: • To detect and study the factors responsible for the NPA • To identify and analyze the factors which hinder effective monitoring of loans • To suggest various remedial measures for NPA management.