Determinants Of Credit Risk Management In Public Sector Commercial Banks: An Econometric Approach

Abstract

This paper analyses credit risk management tactics in public sector commercial banks in India from 2009 to 2023, emphasizing econometric models and their effectiveness. This study examines the factors influencing Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) through econometric techniques such as panel data regression, cointegration, and Granger causality tests. Research indicates substantial correlations among credit risk factors, including Loan Loss Provisions, Secured Advances, and the Credit to Deposit Ratio. Prolonged NPAs underscore inadequacies in credit evaluation and recovery processes. The research highlights targeted interventions, technological incorporation, and sophisticated predictive methodologies to improve sustainable banking practices and economic growth.