Public vs. Private Sector Banks: A Tale of Credit Card NPAs
Public sector banks' (PSBs) gross non-performing assets (NPAs) from credit cards rose to 14.3% in March 2025, compared to 12.7% six months prior, reports the RBI. Meanwhile, private sector banks maintained a stable 2.1%. The RBI has urged caution in unsecured lending, given rising risk concerns.
- Country:
- India
In a recent report, the Reserve Bank of India (RBI) revealed a concerning uptick in the gross non-performing assets (NPAs) from the credit card portfolios of public sector banks, climbing to 14.3% by March 2025. Comparatively, this is a stark increase from the 12.7% figure reported six months earlier.
Despite this troubling trend among public sector banks, their private sector counterparts have maintained a significantly lower NPA rate in the credit card receivables category, which remained steady at 2.1% over the same period, as per the RBI's half-yearly Financial Stability Report.
In response to these developments, the RBI has been proactive in advising banks to exercise caution with unsecured lending, such as credit cards, for nearly two years. The central bank even increased the risk weights on such lending in November 2023 to deter aggressive expansions.
(With inputs from agencies.)
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