Indian banking’s inconvenient truths

Improved NPA ratios seem to indicate that Indian banks have turned a corner when, in reality, the reasons behind the record low numbers point at serious emergent risks.

Indian banks seem to be the picture of health, at least in terms of asset quality. Going by the 2023-24 financial results, 26 of the 40 listed banks—cutting across private sector, public sector and small finance banks—reported net non-performing assets below 1%. Better still, the consolidated average NNPA ratio of all Indian scheduled commercial banks was at a record low of just 0.8%. 

That’s a long way from when the overall banking sector’s asset quality—measured in terms of NNPAs—deteriorated to over 6% between early 2017 and 2018. Banks then saw their profitability take a hit, with some even requiring recapitalization …


Ujval Nanavati

Ujval leads our Business vertical at The Morning Context. In a corporate career spanning 14 years, he has worked across startups, consulting firms, multinational corporations and large Indian companies, including India Infoline, ICICI, KPMG, Tata Steel and Jubilant Pharma. Ujval has been a freelance writer and trainer for eight years, with bylines in Forbes India and The Economic Times.

Editor, Business



Furquan Moharkan

Furquan leads the banking coverage at The Morning Context. A business journalist with eight years of experience and a best-selling author, in his earlier stints as a reporter with the Deccan Herald and a columnist at The Banker, he wrote on banking, financial markets and regulatory affairs. He has extensively covered India's debt market crisis, banking crisis and the fall of Yes Bank.

Editor, Banking