Banks Gross NPAs Likely To Be 2.3%-2.5%

Tue, 07 October 2025

09:44

Gross non-performing assets (NPAs) of banks are likely to have bottomed out and expected to remain in the 2.3 to 2.5 per cent range by March 31, 2026, rating agency Crisil said.

Bad loans had reached a historic low of 2.3 per cent as of March 31, 2025.Asset quality of corporate credit, the largest segment, is foreseen stable. However, NPAs in the MSME segment may inch up, primarily in the export-oriented sectors.

Another reason may be the impact of seasoning following high growth in recent years.

On the retail front, delinquencies in the unsecured segment remain under watch, Crisil said in a statement. Gross NPAs in the MSME segment (17 per cent of overall bank credit) have declined in recent years to 3.6 per cent at the end of March 2025, compared to 8.7 per cent as of March 31, 2021.

Government schemes such as the Credit Guarantee Fund for Micro Units (CGFMU) and Emergency Credit Line Guarantee Scheme (ECLGS) have supported asset quality. Further, some part of the decline is because of bank write-offs, it added.

-- Business Standard

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