Banks’ Gross NPAs Drop 9.5% in Q1FY26: Care Edge

Current Context: On August 22, 2025, Care Edge Ratings released its quarterly banking report for Q1FY26 (April–June 2025).

• Gross Non-Performing Assets (GNPA) of banks declined 9.5% year-on-year (YoY) to ₹4.18 lakh crore, improving the GNPA ratio to 2.3% from 2.7% in Q1FY25.
• Net Non-Performing Assets (NNPA) fell 8.7% YoY to ₹0.92 lakh crore, with the NNPA ratio steady at 0.5%.
• Sequentially, GNPAs rose 0.5% quarter-on-quarter (QoQ) due to stress in microfinance and unsecured retail loans.
• Public Sector Banks (PSBs) showed asset quality improvement across segments except agriculture.
• Key drivers included write-offs, recoveries, and resolutions under the Insolvency and Bankruptcy Code (IBC).

Question:

Q.1 According to Care Edge Ratings’ quarterly banking report (Q1FY26), what was the Gross Non-Performing Assets (GNPA) of banks in value terms?
a) ₹3.85 lakh crore
b) ₹4.18 lakh crore
c) ₹4.50 lakh crore
d) ₹4.92 lakh crore

Answer: b) Gross Non-Performing Assets (GNPA) declined 9.5% YoY to ₹4.18 lakh crore in Q1FY26, reflecting improvement in overall asset quality.