Gross NPAs reduce from 9.11% to 2.58% from March 2021 to March 2025

Current Context: On July 22, 2025, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha that Gross NPAs of Public Sector Banks dropped from 9.11% (₹6.17 lakh crore) in March 2021 to 2.58% (₹2.84 lakh crore) in March 2025.

• Insolvency and Bankruptcy Code (IBC): Removed control from defaulting promoters and barred wilful defaulters
• SARFAESI Act & Recovery of Debts Act: Strengthened recovery mechanisms
• DRT Jurisdiction Raised: From ₹10 lakh to ₹20 lakh to focus on high-value cases
• RBI’s Prudential Framework: Early recognition and resolution of stressed assets
• PSBs set up stressed asset management verticals, adopted the Feet-on-Street model, and improved valuation norms.

Question:

Q.1 What was the Gross NPA ratio of Public Sector Banks (PSBs) as of March 2025?
a) 6.17%
b) 2.58%
c) 4.23%
d) 3.91%

Answer: b) Gross NPAs of PSBs dropped to 2.58% (₹2.84 lakh crore) in March 2025, down from 9.11% in March 2021.