Authors - K.Sarvani, Dinesh, Bijith Narayanan, Aayush Rai Abstract - Digital finance has become a buzzword in every financial service to identify any country's solvency position and competitive environment. This study emphasizes the performance of the banking sector with respective to macro-economic variables to assess the solvency and profitability position of commercial banks in India. Two macroeconomic variables namely gross domestic product, and inflation were considered to identify the performance of nonperforming assets of the public sector banks. There are twelve public sector banks in India as of 2013-24 as per the RBI database. All the public sector banks were considered for the study for ten years. The data was collected from PROWSSIQ for the financial data of public sector banks. Macroeconomic variables were taken from Economic Times data from the published data from web sources. The findings of the study are that non-performing is negatively correlated to inflation and GDP growth rates. The adjusted R Squared value is 61 percent implying that the regressors are perfectly explained that the dependent and independent had a relation. Forecasting the performance of non-performing was done using the SARIMA model. It is found that for all the select banks, non-performing assets are continuously increasing which implies that the recovery of bad debts may be done by the adoption of new fintech apps and it is a positive sign for the performance of the banks in coming years.
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