ICICI Bank and 3 other bank stocks that reduced their NPAs in Q2 to keep an eye on

SYNOPSIS:

Several banks, including ICICI Bank, Federal Bank, Indian Bank, and Bank of India, reported improved asset quality in Q2 FY26, with both gross and net NPA ratios declining year-on-year.

An asset is classified as non-performing when it stops generating income for the bank. Previously, the classification of a non-performing asset (NPA) was based on the ‘past due’ concept, where a loan was considered an NPA if the interest or principal payment remained overdue for a specified period.

If a borrower, whether individual or corporate, fails to repay interest or principal, the loan no longer earns income for the bank and is treated as non-performing. To standardise this, the Reserve Bank of India (RBI) defines NPAs as loans or advances where payments are overdue and no longer bring in