Bad loans of banks (GNPA)
GNPA = Gross Non-Performing Assets- How often
- Each new editionFinancial Stability Report, June and December
- Next release
- Wed 30 DecIn 48 days · expected · 5:00 PM
March 2026, down from 2.2% in September 2025.
Events on this chart
Source: RBI, released 30 Jun 2026 · Chart: Clarity UPSC
- Previous
- 2.2%Sep 2025
- Highest
- 2.2%Sep 2025
- Lowest
- 1.8%Mar 2026
2 readings since Sep 2025.
Story
The share of bank loans that borrowers have stopped repaying.
What is happening now As of Mar 2026
The gross Non-Performing Asset (NPA) ratio of scheduled commercial banks fell to 1.8% at the end of March 2026, from 2.2% six months earlier. The Reserve Bank of India (RBI) called it the lowest level in several decades in its Financial Stability Report of June 2026, and said the improvement was broad-based across bank groups. Fewer loans turned bad: the annual slippage ratio, the share of loans turning bad during the year, eased to 1.2% in 2025-26. Write-offs of bad loans stayed high, especially at private and foreign banks. Agriculture still had the highest ratio, at 5.1%.
Banks had set aside provisions equal to 75.6% of their bad loans. In the RBI's stress tests, the ratio for 46 banks may edge up to 1.9% by March 2028 in the baseline case, and rise to 3.8% or 4.1% under two adverse scenarios. Even then, banks' combined capital would stay above the regulatory minimum.
Why it matters
The gross Non-Performing Asset (NPA) ratio shows how healthy banks' loans are. A bad loan earns no interest, and the bank must set money aside to cover the likely loss. So bad loans eat into profits and capital, and banks with many of them lend less and more cautiously. Firms and households then find credit harder to get.
The ratio also shows how borrowers are doing; a rise can be an early sign of stress among firms or households. The Reserve Bank of India (RBI) uses it, with stress tests, to judge whether banks could absorb a shock and keep depositors' money safe.
What it is
A loan becomes a Non-Performing Asset (NPA) when the borrower stops paying. For a term loan, that means interest or principal has been overdue for more than 90 days. Gross NPAs count all such loans in full, before subtracting the money banks set aside to cover losses (provisions).
The gross NPA ratio divides gross NPAs by gross advances, the total loans of scheduled commercial banks. The Reserve Bank of India reports it in its Financial Stability Report, published in June and December, for the end of March and the end of September.
The ratio rises when many borrowers default, and when banks recognise stress they had not reported. It falls when banks recover, write off or sell bad loans, and when new loans are repaid on time. Bad loans tie up bank capital, so a high ratio makes banks cautious about new lending.
Read this number
- The publisher
- The Reserve Bank of India is India's central bank. It manages money supply, bank regulation, the rupee and the country's foreign exchange reserves.
Terms on this page (2)
- NPA
- Non-Performing Asset
- RBI
- Reserve Bank of India
History
- 2015-16The Asset Quality Review of the Reserve Bank of India makes banks classify stressed loans they had not reported as Non-Performing Assets (NPAs).
- 2016The Insolvency and Bankruptcy Code, 2016 gives lenders a new legal route to resolve loans in default.
- Mar 2018The ratio for scheduled commercial banks stands at 11.2%. It falls to 9.1% by March 2019.
- Sep 2025The ratio falls to 2.2%, a multi-decadal low.
Readings
| Period | Value | Status | Released |
|---|---|---|---|
| Mar 2026 | 1.8% | Final | 30 Jun 2026 |
| Sep 2025 | 2.2% | Final | 31 Dec 2025 |
For UPSC
Know the 90-day rule, the difference between gross and net Non-Performing Assets (NPAs), and the three classes of NPA: substandard, doubtful and loss. The Asset Quality Review (2015-16) and the Insolvency and Bankruptcy Code, 2016 explain the rise and fall of bad loans; the Financial Stability Report, published every June and December, carries the latest figures.