Our study significantly contributes in understanding a comparative framework and the interactions of idiosyncratic and systematic factors for determining non-performing assets (NPA) and rate of recovery for banks in India, as put forward by Basel committee. Although determinants of NPA is very well debated issue, the comparison of public and private sector banks in terms of their assets quality i.e. NPAs and rate of recovery and their determinants like collateral, operational inefficiency, GDP growth rate etc. are the added contribition of this study. We have employed Arrelano–Bond dynamic panel method on 35 banks in India for the period 1998–1999 to 2017–2018 for determinants of NPAs, while determinants of rate of recovery are studied for the period 2003–2004 to 2017–2018. Our findings show that the priority sector loan has significant differences in determining NPA across banks despite them having sufficient collateral. The negative relationship between collateral and recovery, especially for private sector banks, signifies low recovery for illliquid collateral. This study may recommend that a bank with high net interest margin (NIM), high proportion of secured and liquid collateral, and sufficient mix of long- and short-duration loans in line with bank’s asset liability policy can manage their portfolio well.

正如巴塞尔委员会提出的那样，我们的研究对理解比较框架以及确定印度不良银行资产的不良资产（NPA）和回收率的独特因素和系统因素之间的相互作用做出了重要贡献。尽管NPA的决定因素是一个争论不休的问题，但对公共和私营部门银行的资产质量（即NPA和回收率）进行比较，以及诸如抵押品，运营效率低下，GDP增长率等决定因素的比较学习。我们在1998-1999年至2017-2018年间对印度的35家银行采用了Arrelano-Bond动态面板法来确定NPA，而对2003-2004年至2017-2018年间的回收率决定因素进行了研究。我们的研究结果表明，尽管优先抵押部门的贷款有足够的抵押品，但它们在确定银行不良贷款方面存在显着差异。抵押品与回收之间的负相关关系，尤其是对于私营部门银行而言，意味着流动性较差的抵押品的回收率较低。这项研究可能建议，具有高净息差（NIM），有担保和流动抵押品比例高，以及长期和短期贷款的充分组合以及符合银行资产负债政策的银行，可以很好地管理其投资组合。