{"id":14411,"date":"2026-05-27T07:42:30","date_gmt":"2026-05-27T07:42:30","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/gross-npa\/"},"modified":"2026-05-27T07:42:30","modified_gmt":"2026-05-27T07:42:30","slug":"gross-npa","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/gross-npa\/","title":{"rendered":"Gross NPA"},"content":{"rendered":"

Gross NPA<\/a> (Non-Performing Asset) refers to the total value of all loans and advances in a bank’s portfolio<\/a> that have been classified as non-performing, before deducting provisions set aside against those loans. A loan becomes an NPA when interest or principal repayment is overdue for more than 90 days.<\/p>\n

What Is Gross NPA?<\/h2>\n

The RBI defines a loan as an NPA when:
\n– Interest or principal has not been paid for 90 days (or more) for term loans
\n– For cash credit: the account has been out of order (continuously overdrawn beyond limit) for 90 days
\n– For agricultural loans: for two crop seasons (short duration) or one crop season (long duration)<\/p>\n

Gross NPA = Sum of all NPAs in the portfolio (without deducting provisions)<\/p>\n

NPA Classification Under RBI<\/h2>\n

| Category | Classification Criteria |
\n|———|————————|
\n| Substandard | NPA for less than or equal to 12 months |
\n| Doubtful | Substandard for more than 12 months |
\n| Loss | Asset identified as loss by internal\/external auditors |<\/p>\n

Provisioning requirements increase with NPA age: substandard requires 15%, doubtful 25-100%, loss 100% provisioning.<\/p>\n

Gross NPA Ratio<\/h2>\n

Gross NPA Ratio = Gross NPA \/ Total Advances x 100<\/p>\n

India’s banking system Gross NPA ratio peaked at approximately 11.2% in FY18 and has since declined to approximately 4% in FY24 due to recoveries, write-offs, and the IBC resolution process.<\/p>\n

Gross NPA vs Net NPA<\/a><\/h2>\n

Gross NPA includes all bad loans before provisions. Net NPA deducts provisions, showing the actual unrecovered amount.<\/p>\n

Practical Example<\/h2>\n

Bank A has total advances of Rs 50,000 crore. Of these, Rs 3,000 crore are not being repaid regularly. Gross NPA = Rs 3,000 crore. Gross NPA ratio = 3,000 \/ 50,000 = 6%. The bank has provisioned Rs 2,000 crore against these NPAs. Net NPA = Rs 1,000 crore. Net NPA ratio = 2%.<\/p>\n

Key Takeaways<\/h2>\n

– Gross NPA is the total value of non-performing loans; a loan becomes NPA after 90 days of non-payment
\n– Classified as substandard, doubtful, or loss based on how long the loan has been NPA
\n– Gross NPA ratio = Gross NPA \/ Total Advances; India’s banking system ratio improved from 11.2% to ~4% between FY18 and FY24
\n– Provisioning requirements increase progressively as NPAs age
\n– Rising Gross NPAs are a warning signal for banks; declining ratios reflect improving asset quality<\/p>\n","protected":false},"excerpt":{"rendered":"

Gross NPA (Non-Performing Asset) refers to the total value of all loans and advances in a bank’s portfolio that have been classified as non-performing, before deducting provisions set aside against those loans. A loan becomes an NPA when interest or principal repayment is overdue for more than 90 days. What Is Gross NPA? The RBI […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14411","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"Gross NPA (Non-Performing Asset) refers to the total value of all loans and advances in a bank’s portfolio that have been classified as non-performing, before deducting provisions set aside against those loans. A loan becomes an NPA when interest or principal repayment is overdue for more than 90 days. What Is Gross NPA? The RBI…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14411\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}