The aim of this study is to conduct an analytical investigation into the correlation between non-performing assets (NPAs) and the Economic performance of selected public and private sector banks, as measured by the return on assets (ROA) in India. The data was collected from the official websites of the banks, based on their market capitalization. A panel data regression model was employed between 2017 and 2022 to evaluate the impact of NPAs on the Economic performance of both public and private sector banks. The findings indicate that there is a significant and positive association between gross non-performing assets (GNPA) and the Economic performance of the Indian banking sector. Similarly, net non-performing assets (NNPA) have an equivalent impact on the Economic performance of the Indian banking sector. Overall, the study highlights a positive and substantial effect of NPAs on the Economic performance of banks. This research expands upon previous studies on non-performing assets and recommends that both public and private sector banks focus on the NNPA and GNPA of banks to improve the Economic performance of the banking sector. This study enhances the existing literature by comprehensively examining the overall impact of NPAs on the Economic performance of banks.