The Banking industry is dominant in the financial sector and is considered as the backbone of the economy. It engages in the business of providing loans and advances from deposits obtained from household savings. This lending entails immense risk due to the uncertainty of repayment and banks had to be cautious while granting loans. This paper assesses the failure of the banks to do proper due diligence before granting loans which leads to a significant rise in Non-performing Assets. It discusses the reasons behind the rise of non-performing assets in the Indian banking system and the major banks’ crises occurred. It finds from the analysis that the steps were taken by the regulatory body, ‘Reserve Bank of India’ to resolve it, is not enough and such governance has affected the people to a large extent and created problems for them. It recommends and concludes that the bank and regulatory body together need to have accountability and transparency in their transactions to protect the interest of the public at large.

Keywords: Banking system, Non-Performing Assets, Financial position, Banks crisis, Depositors, withdrawal limits, Co-operative Banks, Governance