The gross non-performing assets (NPA) ratio of Scheduled Commercial Banks (SCBs) for domestic operations, were at a historic low of 2.15% as of 2025 end (provisional data), which is lower than 2010-11 level, the Finance Ministry said on Monday.
Gross NPA has been continuously declining during the last eight financial years.
This continuous decline in gross NPAs of SCBs, including Public Sector Banks (PSBs), has led to reduced provisioning by them, which in turn has improved their profitability, thereby causing positive impact on the business growth, the Ministry said.
This also indicates that the asset quality as well as underwriting has improved in PSBs supported by a strong balance sheet and sustained profitability, the Ministry said in a note.
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 the 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, as per the note.
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 September 30, .2025, for domestic operations, the gross NPA ratio of SCBs was 2.15%, PSBs 2.50%, Private Sector Banks (PVBs) 1.73% and Foreign Banks 0.80%.
Also, PSBs have a higher decline in gross NPA ratio in comparison to PVBs and Foreign Banks since March 2018, the Ministry said in the note.
Published – February 09, 2026 08:33 pm IST
