India's bank non-performing assets hit a record low of 2.15% by September 2025, driven by reform efforts and improved financial health.

As of September 2025, India's Scheduled Commercial Banks reported a historic low gross non-performing asset ratio of 2.15% for domestic operations, according to provisional data. The decline, sustained over eight years, follows the 2015 Reserve Bank of India Asset Quality Review and the government’s 4R strategy. Public sector banks saw a sharper reduction since 2018, with NPAs at 2.50%, compared to 1.73% for private banks and 0.80% for foreign banks. Lower NPAs have reduced provisioning, boosted profitability, and strengthened balance sheets across the sector.