NPA Below 1% Or Not? Inside India’s Latest Banking Sector Numbers

A political claim says bank NPAs are now below 1% and profits are at record highs. Recent official and media data largely supports it.

A post from “Nirmala Sitharaman Office” quoted the Prime Minister in the Rajya Sabha saying that bank NPAs, once very high before 2014, are now “below 1%”, and banks’ profits are at record highs. 

The numbers on profits are straightforward, with FY 2024-25 profit totals reported by the government and widely covered by the media. The NPA part needs a small qualifier: “below 1%” aligns with net NPA in recent datasets, while gross NPA is higher.

What The Latest Data Shows: Net NPA Below 1%, Gross NPA Higher

Recent figures show the “below 1%” line fits net NPA, not gross NPA. A Financial Stability Report press release dated 27 June 2024 reported scheduled commercial banks’ gross NPA at 2.8% and net NPA at 0.6% (end-March 2024).
 

On profitability, the government’s “Year Ender 2025” note dated 10 December 2025 said public sector banks’ net profit rose to ₹1.78 lakh crore in FY 2024-25 and also highlighted net NPA improvement.

Media coverage corroborates the profit surge: Business Standard (9 May 2025) and Times of India (9 May 2025) both reported PSBs’ record FY25 profit of ₹1.78 lakh crore.

On system-wide bad loans, Reuters (30 June 2025) reported gross bad loan ratio at 2.3% as of March 2025.

Before getting into the trendline, here is the clean read of the headline indicators being cited across sources.
 

These numbers show why one line can sound contradictory on social media. “Below 1%” holds up if the reference is net NPA. Gross NPA is still in the 2% to 3% range in recent reporting.

How It Reached Here: Clean-Up, Recoveries, And Lower Credit Costs?

The improvement has been building for years, driven by recoveries, write-offs, tighter underwriting, and lower incremental stress compared to the 2015-2018 cycle. The government’s note dated 10 December 2025 said PSBs’ gross NPA fell to 2.58% by March 2025 and highlighted a steady fall from earlier peaks.

A separate government release dated 27 June 2025 also flagged PSBs’ net NPA at 0.52%, describing it as a multi-year low and linking it to improved risk management.

Media reports add context on why profits jumped. The Economic Times (29 May 2025) linked record earnings to improved asset quality, fewer provisions, and stronger operating performance, while also noting pockets of stress such as unsecured and microfinance exposures.

For readers tracking this theme closely, LoansJagat has also summarised the PSB GNPA fall from 9.11% (March 2021) to 2.58% (March 2025), citing official data.

Before the stakeholder reactions, a quick profit snapshot helps anchor the record-high claim.
 

Taken together, the “record profit” claim is strongly backed across government releases and multiple mainstream outlets. The NPA claim is accurate when understood as net NPA.

What Stakeholders Are Saying?

The quoted Rajya Sabha remark highlights NPAs being brought under control and profits hitting new highs. Government releases have echoed the same direction, pointing to NNPA at 0.52% and record PSB profits.

Market watchers quoted by Economic Times have generally credited lower provisions and better asset quality, while still flagging retail risk pockets.

Conclusion

“NPAs below 1%” matches the net NPA trend in recent data, while gross NPA remains higher. Record profits for FY 2024-25 are supported by government releases and multiple news reports.