Issues of Non-Performing Assets, Security Investments Vis-á-Vis Credit, GDP and HDI

Abstract

There are two important determinants in the banking system which directly affect the number of credit deliveries to the economy in the first round and impact the growth and developmental status of the economies in the second round. They are the amount of non-performing assets (NPA) and the number of banking funds invested in the governments’ securities. The present chapter, thus, focuses on the trends of these two and their associations with the credit, GDP and human development of the countries. First, it develops a basic theoretical structure of credit creation in the banking system and then develops theoretical linkages among the two lead variables, NPA and investment, in relation to the rest of the economy. Then, it goes for empirical exercises from the perspectives of the descriptive statistical analysis. The trends of NPA and investment show rising trends in almost all countries. Furthermore, it is found that the signs of correlation coefficients between the two with credit, GDP and HDI are positive in most cases of the list of developing countries and negative in some cases of the list of developed countries.

Citation

Das, R.C. (2023), "Issues of Non-Performing Assets, Security Investments Vis-á-Vis Credit, GDP and HDI", Growth and Developmental Aspects of Credit Allocation: An inquiry for Leading Countries and the Indian States, Emerald Publishing Limited, Leeds, pp. 41-58. https://doi.org/10.1108/978-1-80382-611-020231003