India’s banking sector has achieved a historic milestone, recording its lowest level of Gross Non-Performing Assets (GNPAs) in 20 years, which declined from 11.46% (in 2018) to 2.31% (by March 2025), the lowest in 20 years.

This decline was mainly driven by robust macro-economic fundamentals boosting the Indian banking and Non-Banking Financial (NBF) sectors.

Similarly, Net NPA (NNPA) ratio dropped to its lowest in the last 2 decades i.e. to 0.52% compared to 6.1% (in 2018), driven by stronger provision buffers.

Key Findings:

GNPA of PSBs and SCBs: As per the official data, GNPAs of Public Sector Banks (PSBs) declined from 9.11% (March 2021) to 2.58% (March 2025).

Likewise, the GNPAs of Scheduled Commercial Banks (SCBs) reduced from 7.33% to 2.22% during the same time period.

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