How do you read Gross NPA?

Below 2% is clean for a bank. Between 2% and 5% deserves watching, and above 5% means the book is under real stress. On the scale used here, below 2% reads as clean, 2% to 5% reads as watch, and 5% and above reads as stressed. Lower is usually better.

Gross NPA: what it means and how to read it

What is Gross NPA?

Loans on which the borrower has stopped paying, as a share of all the lender's loans. A loan becomes a non-performing asset when interest or principal is overdue for more than 90 days.

Under RBI rules a loan is classed as non-performing once a payment is more than 90 days overdue. Gross NPA counts every such loan at its full outstanding value, before deducting the provisions the lender has already set aside against it.

The ratio is a lagging signal. Loans go bad a year or two after they are made, so a lender growing its book very fast can show a low ratio simply because the new loans have not had time to sour. The loans moving into NPA each quarter (slippages) and the loans restructured or written off tell you where the ratio is heading.

How it is calculated

Gross NPA ratio = gross non-performing assets ÷ gross advances, as a percentage.

A worked example

A bank has lent ₹1,00,000 Cr and ₹2,400 Cr of that is overdue beyond 90 days: gross NPA = 2.4%.

Why does Gross NPA matter?

It is the plainest measure of how good a lender's loans are. A loan book earns nothing on money that is not coming back.

What is a good Gross NPA?

Below 2% is clean for a bank. Between 2% and 5% deserves watching, and above 5% means the book is under real stress.

Lower is better. For Indian banks, under 2% is strong, 2% to 5% is ordinary, and above 5% is a problem. Read it with net NPA and provision coverage: a high gross figure that is almost fully provided for is far less dangerous than a middling one with thin provisions.

Reading scale

In %

Clean

Watch

Stressed

0%2%5%10%+

On the scale used here, below 2% reads as clean, 2% to 5% reads as watch, and 5% and above reads as stressed.

Lower is usually better.

What are the common mistakes with Gross NPA?

Trusting a low ratio at a fast-growing lender. Growth dilutes the ratio; check it again when growth slows.

Ignoring write-offs. A bank can lower its NPA ratio by writing loans off, which removes them from the count without recovering a rupee.

Overlooking restructured loans, which are not counted as NPA but may become so.

What is a typical Gross NPA in India today?

The median across the 41 listed companies that report it, as of 12 Oct 2026. Half sit above each figure and half below.

By company size

Median

Large Cap · 10 companies1.5%

Mid Cap · 10 companies1.7%

Small Cap · 21 companies2.4%

By industry

Median, largest industries first

Private Sector Bank · 201.5%

Public Sector Bank · 121.9%

Other Bank · 82.4%

Compare a company with its own industry before the whole market. Every industry, and each company's rank within it, is in the screener.

Is this lender sound, and does it earn enough for the risk it takes?

A bank's raw material is other people's money, so the ratios that judge a factory misread it. These are the figures that matter for banks, NBFCs and housing finance companies: what they earn on lending, how many loans have gone bad, how well they are cushioned against losses, and how cheaply they fund themselves.

More in Banks and Lenders

14 lessons

Net interest margin (NIM)

The gap between the interest a lender earns on its loans and investments and the interest it pays on deposits and borrowings, as a share of its interest-earning assets.

Net NPA

Bad loans left after subtracting the provisions the lender has already made against them, as a share of its net loans.

Provision coverage ratio (PCR)

The share of a lender's bad loans that it has already set money aside for.

Credit cost

What a lender charged against profit in the year for loans expected to go bad, as a share of its average loan book.

Cost to income ratio

How many rupees a lender spends on staff, branches and technology to earn ₹100 of income.

Return on assets (ROA)

A lender's net profit as a share of everything on its balance sheet.

Return on equity (lenders)

A lender's net profit as a share of its shareholders' funds, worked out from the same accounts as the other lender figures.