The objective of this study is to analyse the impact of Priority Sector Lending (PSL) on Non-Performing Assets (NPAs) of Public Sector Banks (PSBs) in India. Further, the study investigates the impact of NPAs of PSBs in India on Gross Advances (GAs) and Net Profitability. The paper also examines the presence of structural break in the relationship between GAs and NPAs of PSBs due to the Financial Crisis, 2007-08. The results show that PSL has a significant impact on NPAs of PSBs. There is a negative impact of NPAs on GAs and NP of PSBs. There is structural break in the relationship between GAs and NPAs due to financial crisis.
Non-Performing Assets, Public Sector Banks, Gross Advances, Priority Sector Lending, Financial Crisis
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