India’s bank asset quality improves as GNPA declines to 2.6% in september 2024

The asset quality of India’s banks has improved further with their gross non-performing assets – GNPA declining to 2.6 per cent of total advances in September 2024 which is the lowest level in the last 12 years, according to the RBI’s latest financial stability report.  The report also said the net NPA ratio was around 0.6 per cent during the period. The improvement in asset quality of SCBs was broad-based across sectors and bank groups. 

The share of large borrowers in the GNPA of banks has steadily declined over the past two years. The asset quality of banks’



large borrower portfolios has improved considerably, with the GNPA ratio falling from 4.5 per cent in March 2023 to 2.4 per cent in September 2024. Notably, none of the top 100 borrowers are classified as NPAs in September 2024.

     

Profitability of scheduled commercial banks also improved, with profit after tax surging by 22.2 per cent year-on-year. Public sector banks and Private sector banks recorded growth of 30.2 per cent and 20.2 per cent, respectively, while foreign banks experienced single-digit growth of 8.9 per cent.