New Delhi, Feb 9 (NationPress) The gross NPAs as a percentage of total loans and advances of scheduled commercial banks have shown a consistent decline over the last eight financial years, reaching a historic low of 2.15 percent by the end of September 2025, lower than levels seen in 2010-11, as reported to Parliament on Monday.

The Reserve Bank of India (RBI) has clarified that it does not collect data on gross NPAs monthly. However, based on the latest available data, as of September 30, 2025, the gross NPA ratio for scheduled commercial banks operating domestically stood at 2.15 percent. For public sector banks, this ratio was 2.50 percent, while private sector banks recorded 1.73 percent, and foreign banks had a figure of 0.8 percent.

Minister of State for Finance, Pankaj Chaudhary, noted that public sector banks have experienced a more significant decline in gross NPA ratios compared to their private and foreign counterparts since March 2018, in a written response to a query in the Lok Sabha.

This ongoing decrease in gross NPAs has led to a reduction in provisioning requirements for banks, thereby enhancing their profitability and positively influencing business growth. It also indicates improvements in asset quality and underwriting practices among PSBs, supported by robust balance sheets and sustained profitability, the minister added.

The RBI began an asset quality review in 2015, followed by the government's implementation of a 4R’s strategy aimed at transparently recognizing NPAs, resolving and recovering value from distressed accounts through effective legal frameworks, recapitalizing public sector banks, and reforming the banking and financial landscape to address rising NPAs and increasing loan defaults. These initiatives have facilitated a substantial reduction in gross NPAs, according to the minister.

Comprehensive actions have been undertaken by both the government and the RBI to prevent, mitigate, and recover NPAs. Consequently, the slippage ratio, which indicates the new accumulation of NPAs relative to standard advances, has been steadily improving over the past six financial years for public sector banks when compared to private banks.

Additionally, the government and the RBI have been collaborating to strengthen various recovery mechanisms. These include civil court suits, proceedings in Debts Recovery Tribunals, actions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, negotiated settlements, and the sale of non-performing assets. Various amendments to the IBC have also been proposed to address delays in the completion of Corporate Insolvency Resolution Processes (CIRPs), which are currently pending legislative approval, the minister concluded.