Gross NPA of scheduled commercial banks by
the end of September 2025 was 2.75%
¨
India's banking system
has recorded one of its strongest recoveries in recent years. On February 9,
2026, Parliament was informed that gross non-performing assets (NPAs) of
scheduled commercial banks had declined to a historic low of 2.15% by the end
of September 2025.
¨
This level is even lower
than in 2010–11, indicating a significant turnaround and strengthening after
years of pressure due to bad loans and corporate defaults.
NPAs
¨ Non-performing assets (NPAs) are loans where the borrower has not paid principal or interest for more than 90 days. High NPAs weaken banks' profitability and limit their ability to extend new loans.
¨ A decline in NPAs indicates improved asset quality, stronger credit ratings, and improved payment discipline among borrowers. A decline of 2.15% reflects a healthy banking system, capable of supporting economic growth.
