The main aim of the study is to study the Asset Quality of selected nationalised Banks and assess the determinants of Non Performing Assets of nationalised banks in Tirunelveli District. The present study is based on both analytical and descriptive in methods. The study is primarily analytical in the sense that it analyses various financial variables based on secondary data. The secondary data relevant to the study have been gathered from published sources like the RBI publications such as reports on trends and progress of banking in India, statistical tasks relating to banking in India, RBI Annual Report and RBI Bulletins and Report on Currency and Finance. This study shows that extent of NPA is very high in nationalised banks. Although various steps have been taken by government to reduce the NPAs but still a lot needs to be done to curb this problem. The NPAs level of nationalised banks is still high. It is not at all possible to have zero NPAs. The bank management should speed up the recovery process. The problem of recovery is not with small borrowers but with large borrowers and a strict policy should be followed for solving this problem. The government should also make more provisions for faster settlement of pending cases and also it should reduce the mandatory lending to priority sector as this is the major problem creating area. So the problem of NPA needs lots of serious efforts otherwise NPAs will keep killing the profitability of nationalised banks which is not good for the growing Indian economy at all.