Public Sector Banks Achieve Remarkable Decline in NPAs Over Five Years

In a significant development for public sector banks, gross non-performing assets (NPAs) have seen a marked decline over the last five financial years. This decline was highlighted by the Centre in a recent session of Parliament where Minister of State for Finance, Pankaj Chaudhary, provided detailed figures.

From a peak of ₹6.17 lakh crore in March 2021, gross NPAs decreased dramatically to ₹2.84 lakh crore by March 2025. The reduction from 9.11% to 2.58% signifies a stronger credit environment and vigilant enforcement of financial reforms.

The improvement in NPA management is attributed to several strategic measures implemented by the government and the Reserve Bank of India (RBI). Notably, the Insolvency and Bankruptcy Code (IBC) has redefined creditor-debtor dynamics, alongside amendments to debt recovery laws that have strengthened the recovery infrastructure of banks.

(With inputs from agencies.)