.jpeg?im=FeatureCrop,algorithm=dnn,width=773,height=435 "Bank NPAs At Historic Low Of 2.15%: Govt Tells Lok Sabha")
- Gross NPAs of Scheduled Commercial Banks hit a historic low of 2.15% as of Sept 2025
- The decline in NPAs is attributed to the 2015 Asset Quality Review and the 4Rs strategy
- Public sector banks' gross NPA ratio stood at 2.50%, private banks at 1.73%, foreign banks 0.8%
Gross non-performing assets of Scheduled Commercial Banks for domestic operations have reached a historic low of 2.15%, Minister of State for Finance Pankaj Chaudhary said in response to a query in the Lok Sabha on Monday.
The gross NPA ratio has been continuously declining during the last eight financial years, and reached a historic low of 2.15% at the end of September 2025, the minister said, citing provisional data. This is lower than 2010-11 levels.
The drop was attributed to the initiation of the Asset Quality Review in 2015, after which the Centre implemented "4Rs strategy", which involved recognising NPAs transparently, resolving and recovering value from stressed accounts through clean and effective laws and processes, recapitalising public sector banks, 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 public sector banks, Chaudhary said.
As per the latest data available with RBI, as on Sept. 30 2025, the gross NPA ratio of PSBs was 2.50%, whereas it stood at 1.73% for private banks and 0.8% for foreign banks.
This continuous decline in gross NPAs of SCBs, including PSBs, has led to reduced provisioning by them, which in turn has improved their profitability. It also indicates that the asset quality as well as underwriting has improved in PSBs supported by a strong balance sheet, it added.
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. The slippage ratio in PSBs improved to 0.8% in September, 2025, which is lower than private lenders which stood at 1.8%.
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