India, Feb. 9 -- The Government of India has issued a release:
The gross NPA ratio i.e. gross NPAs as a percentage of gross loans and advances of Scheduled Commercial Banks (SCBs), for domestic operations, has been continuously declining during the last eight financial years, and were at a historic low of 2.15% as at the end of September, 2025 (provisional data), which is lower than 2010-11 level.
The Reserve Bank of India (RBI) initiated the Asset Quality Review (AQR) in 2015, post which the Government initiated 4R's strategy of recognising NPAs transparently, resolving and recovering value from stressed accounts through clean and effective laws and processes, recapitalising PSBs, and reforms in banks and financial ecosystem to address the problem of rising NPAs and growing loan default. Enabled by these initiatives, a large drop in gross NPAs was achieved by PSBs.
RBI has apprised that the data on gross NPAs of SCBs is not collected by RBI on monthly basis. However, as per the latest data available with RBI, as on 30.9.2025, for domestic operations, the gross NPA ratio of SCBs was 2.15%, PSBs was 2.50%, Private Sector Banks (PVBs) was 1.73% and Foreign Banks was 0.80%. Also, PSBs have a higher decline in gross NPA ratio in comparison with the PVBs and Foreign Banks since March, 2018.
This continuous decline in gross NPAs of SCBs, including PSBs, has led to reduced provisioning by them, which in turn has improved their profitability thereby causing positive impact on the business growth. It also indicates that the asset quality as well as underwriting has improved in PSBs supported by a strong balance sheet and sustained profitability.
Comprehensive measures have been taken by the Government and RBI to prevent, reduce and recover NPAs. Due to this the Slippage Ratio, i.e. fresh accretion of NPAs as a percentage of standard advances has been continuously improving for the last six financial years in respect of PSBs in comparison with PVBs. The slippage ratio in PSBs improved to 0.8% in September, 2025, which is lower than PVBs which stood at 1.8%. The measures taken include, inter alia, the following:
This information was given by Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha today.
Disclaimer: Curated by HT Syndication.
