This Paper Explores an Empirical Approach to the Analysis of Commercialbanks' Nonperforming Loans (Npls) In the Indian Context. the Empirical Analysisevaluates As to How Banks’ Non-Performing Loans Are Influenced By Three Majorsets of Economic and Financial Factors, I.E., Terms of Credit, Bank Sizeinduced Risk Preferences and Macroeconomic Shocks. the Empirical Results from Panel Regression Models Suggest That Termsof Credit Variables Have Significant Effect on the Banks' Non-Performing Loansin the Presence of Bank Size Induced Risk Preferences and Macroeconomic Shocks.Moreover, Alternative Measures of Bank Size Could Give Rise to Differentialimpact on Bank's Non-Performing Loans. In Regard to Terms of Credit Variables,Changes In the Cost of Credit In Terms of Expectation of Higher Interest Rateinduce Rise In Npas. on the Other Hand, Factors Like Horizon of Maturity Ofcredit, Better Credit Culture, Favorable Macroeconomic and Business Conditionslead to Lowering of Npas. Today the Indian Banking System Has Undergone Significanttransformation Following Financial Sector Reforms, Adopting International Bestpractices. Several Prudential, Payment, Integrating and Provisioning Norms Havebeen Introduced, and These Are Pressurizing Banks to Improve Efficiency Andtrim Down Npas to Improve the Financial Health In the Banking System. It Isamong the Best In the World Because Indian Banks Are Favorable on Growth, Assetquality and Profitability; Rbi and Government Have Made some Notable Cha ...