Net NPA: what it means and how to read it
What is Net NPA?
Bad loans left after subtracting the provisions the lender has already made against them, as a share of its net loans.
Gross NPA says how many loans have gone bad; net NPA says how much of that damage is still unpaid for. A provision is profit a lender has already given up to cover an expected loss, so the net figure is what remains exposed.
Because it sits directly against the lender's capital, net NPA is the figure regulators watch. Under RBI's prompt corrective action framework a bank whose net NPA rises above 6% faces restrictions on lending and expansion.
How it is calculated
A worked example
Why does Net NPA matter?
It shows the part of the bad loans that has not yet been paid for out of profit, and so can still hurt future earnings and capital.
What is a good Net NPA?
Below 1% is strong and under 0.5% is very clean. Above 3% the lender still has heavy losses to absorb.
Under 1% is healthy. The gap between gross and net NPA is as telling as either number: a wide gap means the lender has provided conservatively.
Reading scale
What are the common mistakes with Net NPA?
What is a typical Net 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.