The centre told the parliament today about the gross non-performing assets (NPAs) of public sector banks which have been declining during the last five financial year. The NAP has reduced from reduced from 9.11 % to 2.58% from March 2021 to March 2025.
A sharp deterioration in their gross NPAs from ₹6.17 lakh crore in March 2021 to ₹2.84 lakh crore in March 2025 is a productive sign for the public sector banks.
NPAs are loans or advances for which the borrower has not made principal or interest payments for a prearranged amount of time, usually 90 days. While, Gross NPA refers to the total value of loans and developments in a bank’s portfolio.
According to the MoS Finance, here are the details:
Year: 2021
Gross NPA: Rs 6,16,616 crore
Percentage: 9.11%,
Year: 2022
Gross NPA: Rs 5,40,958 crore
Percentage: 7.28%
Year: 2023
Gross NPA: Rs 4,28,197 crore
Percentage: 4.97%
Year: 2024
Gross NPA: Rs 3,39,541 crore
Percentage: 3.47%
Furthermore, the MoS apprised the House that the government and RBI have taken comprehensive measures to recover and reduce NPAs.
As part of the reforms, a change in credit culture has been effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners, and debarring wilful defaulters from the resolution process.
To make the process more stringent, a personal guarantor to a corporate debtor has also been brought under the ambit of IBC, the minister said.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Recovery of Debt and Bankruptcy Act have been amended to make them more effective.
Pecuniary jurisdiction of Debt Recovery Tribunals (DRTs) was increased from Rs 10 lakhs to Rs 20 lakhs to enable the DRTs to focus on high-value cases, resulting in higher recovery for the banks and financial institutions, he said.
Public Sector Banks have set up specialized stressed assets management verticals and branches for effective monitoring and focused follow-up of NPA accounts, which facilitates quicker and improved resolution/ recoveries. Deployment of Business correspondents and adoption of Feet-on-street model have also boosted the recovery trajectory of NPAs in banks, he said.
Practical Context for resolution of stressed assets was issued by RBI to provide a framework for early acknowledgement, reporting and time bound resolve of stressed assets, with a build-in incentive to lenders for early adoption of a resolution plan.
As per RBI guidelines, banks have a board approved policy in place for evaluation of assets done by professionally skilled independent valuers. RBI direct banks to have a procedure for empanelment of professional valuers based on prescribed minimum qualifications and maintain a register of approved list of valuers.
(With Inputs from ANI)
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