Why in the News
The Finance Ministry informed that the gross non performing assets ratio of Scheduled Commercial Banks has declined to a historic low of 2.15 percent as of September 30, 2025, the lowest level seen in more than a decade.
Key FactsÂ
- Gross NPA ratio of SCBs: 2.15 percent
- Trend: Continuous decline for the last eight financial years
- Comparison: Lower than the level seen in 2010-11
Bank wise Gross NPA Ratio as on Sept 30, 2025
- Public Sector Banks: 2.50 percent
- Private Sector Banks: 1.73 percent
- Foreign Banks: 0.80 percent
Reasons for Decline in NPAs
- Asset Quality Review initiated by Reserve Bank of India in 2015
- Government’s 4R strategy
- Recognition of NPAs
- Resolution and recovery
- Recapitalisation of PSBs
- Reforms in banking and financial ecosystem
- Improved underwriting standards
- Stronger balance sheets and sustained profitability of banks
| [2019] What was the purpose of the Inter-Creditor Agreement signed by Indian banks and financial institutions recently?Â
(a) To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit (b) To support the infrastructure projects of Central and State Governments (c) To act as independent regulator in case of applications for loans of Rs. 50 crore or more (d) To aim at faster resolution of stressed assets of Rs. 50 crore or more which are under consortium lending |
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