The Reserve Bank of India (RBI) in its half-yearly The Reserve Financial Stability Report has said that the gross non-performing assets (GNPAs) of the banking system declined to a multi-decadal low of 2.3 per cent in March 2025. Meanwhile, it has indicated a possible rise in GNPAs of 46 banks accounting for 98 per cent of the total assets of scheduled commercial banks (SCBs) to 2.6 per cent by March 2027. The report showed that the loan write-offs, including technical write-offs -- which can be recovered in the future -- were one of the prime reasons for the reduction in GNPAs over the last five years.

In FY 25, write-offs to GNPA ratio for SCBs has increased to 31.8 per cent compared to 29.5 per cent in the previous year, led by private sector lenders and foreign banks, and added that write-offs by PSBs exhibited a marginal decline. The half-yearly slippage ratio, measuring new accretions to NPAs as a share of standard advances at the beginning of the half year, remained stable at 0.7 per cent. Further, on sectoral front, the agricultural sector had the highest contribution to GNPAs at 6.1 per cent, while it was broadly remained stable at 1.2 per cent for personal loans. Meanwhile, GNPAs of public sector banks from the credit card segment increased to 14.3 per cent as against 2.1 per cent in case of the private sector rivals.

The report also showed that share of the large borrowers in the GNPAs was declined to 37.5 per cent as compared to their 43.9 per cent share in the overall outstanding loans. It added that this cohort’s GNPA ratio declined from 3.8 per cent in September 2023 to 1.9 per cent in March 2025. Further, the share of top-100 borrowers in the overall loan pie was stable over the last six months at 15.2 per cent as none of them were classified as NPAs.