The banking industry in India is currently burdened with challenge of managing huge and surging GNPAs. The Gross Non-Performing Assets (GNPA) is one of the important indicators measuring the financial stability and performance of a banks in an economy. Empirical evidences of research suggest that many macroeconomic and Bank specific variables impact the GNPA of Banks. Since the time India opened up its economy (1991) the economy is not only affected by the domestic factors but also by the global economic factors as a result of trading and investment activities with the foreign countries. In this study a few selected economic indicators of the major trading partners China, U.S & U.A.E are considered as external variables. The domestic economic indicators as internal variables. The impact of these variables on the GNPA’s of the Indian banks and also impact of factors varies between the Public and private sector banks are analyzed. The study period is from 2010 to 2020 and the variables are assessed through descriptive Statistics and Correlation. The study reveals that the impact of the external and internal factors had a similar effect on the NPA’s of the public and private sector banks. There is high causal relationship between GNPA’s of scheduled commercial banks of India and the variables such as GDP of India, Export of India, Import of India, Inflation of India, Lending rates of India, Official exchange rate (UD $). In external variables, there is a high causal relationship between the GNPA’s of scheduled commercial banks of India and variables such as GDP of U.S &China. There is low causal relationship with other variables.

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Keywords: Gross Non-Performing Assets, Domestic economic factors, Global economic factors, Trading partners, Scheduled commercial banks,India.