Gross NPAs of Scheduled Commercial Banks for domestic operations has reached 2.15% as of Sep 2025

Mumbai: The Gross NPA has reportedly for domestic operations has witnessed a continuous decline during the last eight financial years, and were at a historic low of 2.15% as the end of September 2025 (Provisional Data) which is lower than 2010-11 level. The strategic factor behind the large drop in gross NPA was due to RBI initiated the Asset Quality Review (AQR) in 2015 after which the government initiated 4R’s strategy of recognising NPAs transparently, resolving and recovering value from stressed accounts through clean and effective laws with restructuring and recapitalizing the PSBs and reforms in banks and financial ecosystem to counter the problem of rising NPAs and growing loan default.

As per the data on latest basis available with RBI as on 30.09.2025 for domestic operations, the gross NPA ratio of Scheduled Commercial Banks was 2.15%, PSBs was 2.50%, Private Sector Banks was 1.73% and Foreign Banks was 0.80%. Since, March 2018 the PSBs have a higher decline in gross NPA ratio in comparison with the PVBs and Foreign Banks. The continuous decline in gross NPAs of SCBs which includes public sector banks has led to decline provisioning by them, turning their profitability thereby causing positive impact on the business growth.

The comprehensive measures taken under the Government and RBI to prevent, reduce, and recover NPAs. Through this Slippage Ratio, the fresh accretion of NPA 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 public sector banks has improved to 0.8% in September 2025 which is lower than PVBs which stood at 1.8%.