Banks' Gross Non-Performing Assets Hit 13-Year Low; Agriculture Sector Reports Highest GNPA, Retail Loans Lowest: RBI

According to a report released by the Reserve Bank of India (RBI) on Thursday (26 December), the ratio of gross non-performing assets (GNPAs) of scheduled commercial banks (SCBs) fell to a 13-year low of 2.5 per cent at the close of September 2024.

The report indicated that the country's commercial banks maintained a strong consolidated balance sheet in the 2024 fiscal year (FY24), characterised by continuous growth in both loans and deposits.

The RBI's report on the Trend and Progress of Banking in India 2023-24 stated that there was an improvement in asset quality. The GNPA ratio dropped to a 13-year low of 2.7 per cent at the end of March 2024, further decreasing to 2.5 per cent by the end of September 2024.

The banks' GNPAs saw a year-on-year reduction of 15.9 per cent, amounting to Rs 4.8 lakh crore as of 31 March 2024. This enhancement in lenders' asset quality was attributed to improved recoveries and upgrades, Indian Express reported.

The report also mentioned that the most recent statistics show an additional improvement in the gross NPA ratio, which stood at 2.5 per cent at the end of September 2024. In the fiscal year concluding in March 2011, banks reported a gross NPA standing at 2.35 per cent.

As of the end of September 2024, the forming GNPA ratio was the highest in the agricultural sector, standing at 6.2 per cent. Conversely, retail loans had the lowest ratio, at just 1.2 per cent.

The GNPA ratio for education loans saw a decline, moving from 5.8 per cent at the end of March 2023, to 3.6 per cent at the end of March 2024, and further to 2.7 per cent by the end of September 2024. Despite this decrease, it still marked the highest ratio among retail loan segments, with credit card receivables and consumer durables following closely behind.