Business
Banks’ Gross NPAs Improve To Historic Low Of 2.15%: MoS Finance Pankaj Chaudhary
Last Updated:
Gross NPAs of Scheduled Commercial Banks fell to a record low of 2.15% in Sep 2025, boosted by IBC and 4R reforms, improving profitability and assets.
Union Finance Minister Pankaj Chaudhary. (File Photo: PTI)
Gross non-performing assets (NPAs) of scheduled commercial banks (SCBs) for domestic operations declined to a historic low of 2.15% as of September 2025, said Minister of State for Finance Pankaj Chaudhary on February 9. He added that this continuous decline in gross NPAs of SCBs, including PSBs, has led to reduced provisioning by them, which has improved their profitability and business growth.
“The gross NPA ratio i.e. gross NPAs as a percentage of gross loans and advances of Scheduled Commercial Banks (SCBs), for domestic operations, has been continuously declining during the last eight financial years, and were at a historic low of 2.15% as at the end of September, 2025 (provisional data), which is lower than 2010-11 level,” Chaudhary said in reply to a query in the Lok Sabha
The Reserve Bank of India (RBI) initiated the Asset Quality Review (AQR) in 2015, post which the government initiated 4R’s strategy — recognising NPAs transparently, resolving and recovering value from stressed accounts through clean and effective laws and processes, recapitalising PSBs, and reforms in banks and financial ecosystem to address the problem of rising NPAs and growing loan default. Enabled by these initiatives, a large drop in gross NPAs was achieved by PSBs, according to a statement.
The RBI has apprised that the data on gross NPAs of SCBs is not collected by RBI on monthly basis. According to provisional data available with the RBI as of September 30, 2025, the gross NPA ratio stood at 2.50% for public sector banks (PSBs), 1.73% for private sector banks (PVBs), and 0.80% for foreign banks.
The government said PSBs have witnessed a sharper decline in NPAs compared with private and foreign banks since March 2018, underscoring the impact of targeted reforms in state-owned lenders.
“This continuous decline in gross NPAs of SCBs, including PSBs, has led to reduced provisioning by them, which in turn has improved their profitability thereby causing positive impact on the business growth. It also indicates that the asset quality as well as underwriting has improved in PSBs supported by a strong balance sheet and sustained profitability,” Chaudhary said.
Key legislative and regulatory changes cited include the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, which marked a shift from a ‘debtor in possession’ to a ‘creditor in control’ framework.
The behavioural impact of the IBC is evident in early settlements. As of March 2025, over 30,000 cases involving underlying defaults of ₹13.78 lakh crore were settled at the pre-admission stage itself, the government said.
Slippages fall below private banks
Fresh accretion of NPAs, measured by the slippage ratio, has also improved significantly. The slippage ratio for PSBs declined to 0.8% in September 2025, compared with 1.8% for private sector banks, indicating stronger underwriting and monitoring standards in state-owned banks.
Lower NPAs have led to reduced provisioning, which has in turn improved profitability and supported credit growth, the government noted.
“This continuous decline in gross NPAs has strengthened bank balance sheets and improved asset quality, supported by sustained profitability,” the statement said.
Stronger recovery mechanisms
The government and RBI have implemented a range of recovery measures, including amendments to the SARFAESI Act, expansion of Debt Recovery Tribunals (DRTs), enhanced oversight of Asset Reconstruction Companies (ARCs), and mandatory registration of security interests with CERSAI.
Public sector banks have also set up specialised stressed asset management verticals, adopted automated Early Warning Systems (EWS) with nearly 80 triggers, and strengthened on-ground recovery efforts through dedicated follow-up mechanisms.
The government said it continues to work with the RBI to further strengthen recovery frameworks and address delays in insolvency resolution processes through proposed amendments to the IBC that are currently under legislative consideration.
Click here to add News18 as your preferred news source on Google.
February 09, 2026, 17:44 IST
Read More
The United States and Bangladesh on Monday finalised the United States–Bangladesh Agreement on Reciprocal Trade, wrapping up negotiations as both countries stepped in to strengthen bilateral economic ties. Under the revised framework, Bangladeshi exports to the American market will attract a 19% tariff, marginally lower than the 20% imposed in August and significantly below the original reciprocal rate of 37%. The agreement was signed by US Trade Representative Jamieson Greer and Bangladesh’s Adviser for Commerce, Textiles and Jute, and Civil Aviation and Tourism, Sheikh Bashir Uddin, in the presence of Bangladesh Commerce Secretary Mahbubur Rahman and Assistant US Trade Representative Brendan Lynch.
Key terms of the agreement
- Perks for Bangladesh: Washington will reduce the reciprocal tariff imposed under Executive Order 14257 to 19% on Bangladeshi goods. In addition, selected products listed in Annex III of Executive Order 14346 will qualify for a zero-tariff rate. The United States has committed to creating a mechanism under which certain textile and apparel products from Bangladesh can qualify for a zero reciprocal tariff rate. Under this arrangement, a yet-to-be-finalised volume of garments and textile imports from Bangladesh will be allowed to enter the US at the reduced rate. The permitted volume will depend on Bangladesh’s imports of American textile inputs, such as US-produced cotton and man-made fibres, effectively tying the benefit to the level of US exports.
- Perks for US: Bangladesh will grant wide preferential entry to US industrial and agricultural products, covering chemicals, medical devices, machinery, automobiles and components, ICT equipment, energy supplies, soy items, dairy, beef, poultry, nuts and fruit.
- Both governments will seek to remove Bangladeshi non-tariff barriers affecting trade and investment. Measures include recognising vehicles meeting US federal safety and emission rules, accepting US Food and Drug Administration certificates and prior approvals for pharmaceuticals and medical devices, and ending import restrictions or licensing on US remanufactured products and parts.
- Bangladesh will enable trusted cross-border data flows, support a lasting WTO ban on customs duties for electronic transmissions, rely on science- and risk-based systems for safe American food and farm imports, open up the insurance sector, digitise customs and adopt sound regulatory practices.
- Commitments have also been made on labour. Bangladesh will act to uphold internationally recognised rights, prohibit imports made through forced or compulsory labour, amend legislation to secure freedom of association and collective bargaining, and tighten enforcement.
- Dhaka has pledged to maintain strong environmental safeguards, implement its environmental laws, improve trade facilitation at the border and tackle market distortions linked to subsidies and state-owned firms. Furthermore, the South Asian giant has committed to reinforce and apply comprehensive anti-corruption legislation.
- On intellectual property, Bangladesh will pursue tougher protection and enforcement, including ratifying or joining certain global treaties. It will also introduce provisions on geographical indications aimed at ensuring continued US market access, particularly for producers of cheese and meat that use common names.
- The two countries intend to align more closely on economic and national security matters, strengthening supply chains and innovation while working together against unfair trade practices, duty evasion, export control risks and by exchanging information on inbound investment.
- American agencies such as the Export-Import Bank and the US International Development Finance Corporation may, where eligible and in accordance with law, look at backing investment in priority Bangladeshi sectors alongside US private firms.
- The two countries also acknowledged recent and upcoming commercial agreements spanning agriculture, energy and technology. These include the procurement of aircraft, the purchase of around $3.5 billion worth of American agricultural commodities such as wheat, soy, cotton and corn, and energy imports estimated to be valued at $15 billion over the next 15 years.
Both sides said they would proceed promptly, following their respective internal processes, to complete formalities required for the Agreement on Reciprocal Trade to take effect.
The tech giants are under scrutiny over social media addiction in a landmark jury trial in Los Angeles
Source link
Even with sophisticated technology it is still difficult to detect fake foods.
Source link
India, Malaysia agree to boost trade facilitation during PM Modi visit
US and Bangladesh strike new trade deal — key terms of the agreement – The Times of India
49ers’ Keion White has surgery after being shot in ankle in S.F.
-
Entertainment4 days agoHow a factory error in China created a viral “crying horse” Lunar New Year trend
-
Tech1 week agoHow to Watch the 2026 Winter Olympics
-
Business1 week agoNew York AG issues warning around prediction markets ahead of Super Bowl
-
Business1 week agoPost-Budget Session: Bulls Push Sensex Up By Over 900 Points, Nifty Reclaims 25,000
-
Entertainment1 week agoThe Traitors’ winner Rachel Duffy breaks heart with touching tribute to mum Anne
-
Tech1 week agoI Tested 10 Popular Date-Night Boxes With My Hinge Dates
-
Fashion1 week agoCanada could lift GDP 7% by easing internal trade barriers
-
Tech1 week agoThe Best Floodlight Security Cameras for Your Home