The gross NPA ratio, which is 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.

They were at a historic low of 2.15 per cent as at the end of September 2025 (provisional data), which is lower than 2010-11 level, Minister of State in the Ministry of Finance Pankaj Chaudhary in a written reply to a question in Lok Sabha said on Monday.

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, the minister said in his written reply today.
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 of September 2025, for domestic operations, the gross NPA ratio of SCBs was 2.15 per cent, PSBs was 2.50 per cent, Private Sector Banks (PVBs) was 1.73 per cent and Foreign Banks was 0.80 per cent. 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,” the minister said.