Profitability and Asset Management of Public Sector Commercial Banks in India

This paper aims to analyze the performance of profitability and asset management of selected Scheduled Commercial Banks in India during the period 2006-2019. This study investigates the impact of credit risk management on the profitability of Indian Public sector commercial banks. Data from 20 commercial banks for the period 2006 to 2019 have been collected and analyzed using fixed regression analysis and panel data analysis. In the model specification, return on asset (ROA) were used as bank profitability indicators while capital adequacy ratio (CAR), bank size (TA, Total Asset) and non-performing loan ratio (NPL) were used as indicators of credit risk management. The findings reveal that credit risk management has significant impact on the profitability of Indian Public sector commercial banks. The findings also describes that credit risk management does have an impact on profitability of commercial banks. The study thus recommends focusing on effective credit risk management for commercial banks of India in order to maintain an optimum level of capital adequacy ratio, controls and monitors non-performing loan and increases bank size to enhance financial performance. Keywords: Profitability performance, Returns on Assets, Public sector, scheduled commercial banks, Credit risk management