What is Net Interest Margin

The post-crisis period in India witnessed economic slowdown consequent upon economy wide loan default in the infrastructure, real estate, and construction sectors. The asset quality problem of the Indian commercial banks became so acute that many of the weak banks were to be merged with strong banks in the interest of the depositors in order to arrest any contagion effect. The old generation private sector banks in India do not have government patronage or continuing support of the founder communities. This chapter analyzes the key financial ratios of these banks and tries to find out whether nonperforming assets are the sole determinants of the performances of these banks.