Economic Survey 2024: More debt recovery and improving borrowers drag banks’ GNPA to 12-year low of 2.8%

The gross non-performing assets (GNPA) ratio of SCBs continued its downward trend, reaching a 12-year low of 2.8 per cent at the end of March 2024.

With more debt recovery, improved borrower selection process and debt awareness among large borrowers, the gross non-performing assets (GNPA) of Indian banks were at a 12-year low at 2.8 percent till March 2024, the Economic Survey for fiscal 2023-24 showed.

“The gross non-performing assets (GNPA) ratio of SCBs continued its downward trend, reaching a 12-year low of 2.8 percent at the end of March 2024 from its peak of 11.2 percent in FY18,” the survey showed.

In addition to regulatory capital and liquidity requirements, the economic survey showed that qualitative metrics such as enhanced disclosures, robust code of conduct, and transparent governance structures have also improved banking performance.

The improvement in SCBs’ asset quality has been broad based. The GNPA ratio of the agriculture sector remains high at 6.5 per cent at the end of
March 2024, but it has recorded persistent improvement during H2 of FY24, the survey showed.

The GNPA ratio in the personal loans segment improved across all categories. Asset quality improved across all significant sub-sectors within the industrial sector, barring vehicles and transport equipment. Lower GNPAs and high provisions accumulated in recent years contributed to a decline in NNPAs, it showed.