CareEdge Ratings predicts a slight rise in India's bank non-performing assets, linked to retail loan stress.

CareEdge Ratings predicts a slight increase in non-performing assets (NPAs) in India's banking sector by the end of FY26, mainly due to stress in unsecured retail loans like personal and microfinance loans. The gross NPA ratio for scheduled commercial banks is expected to rise from 2.3% to around 2.3-2.4%. Despite this, overall asset quality remains stable, with a shift towards more retail lending and less corporate borrowing.