Non-Performing Assets (NPAs) diminish Indian banks' capital and profitability by halting interest income, restricting lending, and threatening financial stability.

CURRENT STATE

Indian banks' gross NPAs have declined to a historic low of 2.15%, boosting profitability and a Capital to Risk-Weighted Assets Ratio of 17.2%. However, NPAs still tie up funds, limiting credit growth. Public Sector Banks' gross NPA ratio was 2.50% as of September 30, 2025.

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