Reserve Bank of India (RBI) Projects 1.9% GNPA Ratio by March 2027

Key facts

• The Reserve Bank of India (RBI) recorded the gross non-performing asset (GNPA) ratio of scheduled commercial banks at multi-year lows of 2.3% in March 2025 and 2.2% in September 2025.
• The net non-performing asset (NNPA) ratio for scheduled commercial banks remained at approximately 0.5% since the March 2025 quarter.
• The RBI projects the bad loans ratio for Indian banks to fall to 1.9% by March 2027 under the baseline scenario.
• System-wide capital-to-risk weighted assets ratios and Common equity Tier-1 ratios remained comfortably above Basel III norms and regulatory thresholds.
• Macro stress tests indicate that banks would maintain capital levels above regulatory minimums even under severe macroeconomic scenarios.
• The RBI released its Financial Stability report in December, noting that the banking sector closed 2025 with its cleanest balance sheets in over a decade.
• The RBI attributed the improvement in asset quality to legacy bad-loan resolution, tighter underwriting standards, and steady economic growth.