India's Worst Performing Banks on This Important Ratio in 2025

Imagine you lend money to a friend and they promise to return it in three months. However, even after continuous reminders, you don't get your money back. This means this loan has stopped working for you.

The same is the case for banks. Any loan for which the principal or interest payment is overdue for 90 days is called a non-performing asset (NPA).

NPAs are of two types. Gross NPAs refer to the total amount of debts that have stopped generating income for the bank. Net NPAs, on the other hand, are the total amount of bad loans the bank has after accounting for provisions.

High NPAs indicate poor financial health for a bank, as they place a significant burden on its operations and signal potential risks to its overall stability.

Here are five banks with high NPAs in the last five years.

#1 Punjab National Bank

First on our list is Punjab National Bank (PNB).

The bank has a five-year average gross NPA of 8.86% and a net NPA of 2.88%.

PNB's loan book is dominated by corporate debt, but the MSME (micro, small and medium enterprises) and agricultural sector account for the majority of the NPAs.

In FY25, the gross NPA and net NPA stood at 3.95% and 0.4% respectively. The bank has guided towards a gross NPA and net NPA below 3% and 0.35%, respectively, for 2026.

Both the gross NPA and net NPA have consistently reduced over the last few years on account of improvement in asset quality, aggressive write-offs, and stringent credit policy.

However, despite all this, PNB is one of the banks with the highest gross NPA and net NPA ratios.

Coming to its financials, the bank's net interest income grew at a compound annual growth rate (CAGR) of 7% in the last five years and the net profit zoomed 48.5% CAGR. The provisions decreased by more than half during the same period.

For more details, check out Punjab National Bank's financial factsheet and latest quarterly results.

Punjab National Bank Financials (FY21-25)

Particulars (in Rs Mn)	Mar-2021	Mar-2022	Mar-2023	Mar-2024	Mar-2025
Net Interest Income	3,11,305	2,94,188	3,50,283	4,05,304	4,33,060
Net Interest Margin (%)	38.00%	38.60%	40.30%	37.20%	34.90%
Gross NPA	10,44,230	9,24,480	7,73,280	5,63,430	4,40,820
Gross NPA (%)	14.10%	11.80%	8.70%	5.70%	4.00%
Net NPA	6,51,279	3,49,090	2,25,850	67,990	42,910
Net NPA (%)	5.70%	4.80%	2.70%	0.70%	0.40%
Provision Coverage Ratio (%)	80.10%	81.60%	86.90%	95.40%	96.80%

Source: Company Website

#2 Union Bank of India

Second on the list is Union Bank of India.

The bank has a five-year average gross NPA of 8.15% and a yearly average net NPA of 2.33%.

Union Bank of India's loan book is dominated by retail, agriculture, and MSME loans, which constitute almost 54% of the total advances.

Corporate loans form the next majority, of which 'A' and above rated securities constitute 85% of the corporate loan book, whereas below A-rated securities constitute the rest.

In FY25, the bank's gross NPA and net NPA stood at 3.6% and 0.63%, which is the least among the last five years. The primary reason for the significant improvement in asset quality is aggressive write-offs, recoveries of bad debts, and a higher provision coverage.

At present, the bank is in line with its gross NPA guidance of less than 4% and aims to improve this further through stringent credit policies.

However, the total net NPAs have grown from Rs 63 bn to 73 bn in just 12 months, primarily due to new NPAs that have been added during the year.

Nevertheless, the bank is taking measures to ensure its asset quality remains intact. The management increased the provision coverage ratio in response to the new bad debts.

Coming to its financials, the bank's net interest income and net profit grew by a CAGR of 8.7% and 44.5% respectively, whereas the provisions reduced slightly.

To know more, check out Union Bank's financial factsheet and latest quarterly results.

Union Bank of India Financials (FY21-25)

Particulars (in Rs Mn)	Mar-2021	Mar-2022	Mar-2023	Mar-2024	Mar-2025
Net Interest Income	2,51,991	2,80,512	3,31,303	3,70,119	3,76,840
Net Interest Margin (%)	36.40%	41.10%	40.80%	36.90%	34.80%
Gross NPA	8,97,880	7,95,870	6,09,870	4,30,980	3,53,500
Gross NPA (%)	13.70%	11.10%	7.50%	4.80%	3.60%
Net NPA	2,72,810	2,43,030	1,29,274	89,900	59,690
Net NPA (%)	4.60%	3.70%	1.70%	1.00%	0.60%
Provision Coverage Ratio (%)	81.30%	83.60%	90.30%	92.70%	94.60%

Source: Company Website

#3 City Union Bank

Next on the list is City Union Bank.

The bank has a five-year average gross NPA of 4.25% and an average net NPA of 2.3%.

In FY25, the gross NPA and net NPA stood at 3.1% and 1.2% respectively. The gross NPAs reduced considerably from Rs 18.5 bn to 16.3 bn, and net NPAs reduced from Rs 8.9 bn to Rs 6.5 bn.

The bank's loan book is dominated by MSME loans, followed by agricultural loans, and both categories have high NPAs compared to other categories.

Although the bank's asset quality has been improving over the last few years, the bank expects slippages to be around Rs 7 bn in FY26. So, the provisions are expected to increase slightly this year.

City Union Bank has been taking extensive measures to improve its asset quality with a strict loan recovery policy and credit risk management policy.

This has reflected in its improving financials. In the last five years, the bank's net interest income and net profit grew at a CAGR of 4.8% and 13.7% respectively, and the provisions fell by over Rs 3 bn.

To know more, check out City Union Bank's financial factsheet and latest quarterly results.

City Union Bank Financials (FY21-25)

Particulars (in Rs Mn)	Mar-2021	Mar-2022	Mar-2023	Mar-2024	Mar-2025
Net Interest Income	18,297	19,165	21,628	21,235	23,157
Net Interest Margin (%)	44.30%	46.70%	45.90%	40.30%	39.70%
Gross NPA	18,931	19,330	19,200	18,544	16,381
Gross NPA (%)	5.10%	4.70%	4.40%	4.00%	3.10%
Net NPA	10,751	11,910	10,180	8,986	6,530
Net NPA (%)	3.00%	3.00%	2.40%	2.00%	1.30%
Provision Coverage Ratio (%)	64.00%	64.00%	69.00%	72.00%	78.00%

Source: Company Website

#4 Jammu & Kashmir Bank

Fourth on the list is Jammu and Kashmir Bank (J&K Bank).

The bank has a five-year average gross NPA of 5% and a yearly average net NPA of 2.15%.

In FY25, the gross NPA and net NPA stood at 3.8% and 1.25% respectively, down from 4.1% and 1.3% respectively from the previous financial year.

The bank's loan book is dominated by retail, MSME, and agriculture advances (70%), followed by corporate advances (30%). Within the corporate advances, 60% of the borrowers are rated AAA, whereas the rest are rated in A, BBB and below categories.

In the retail, MSME, and agriculture category, the majority of the bad debts are in the agriculture and MSME categories.

The bank's asset quality has been improving on account of loan recoveries, upgradations and lower slippages. However, in the June 2025 quarter, the slippages increased.

Coming to the financials, the net interest income and net profit grew by a CAGR of 9% and 37.2% in the last five years, whereas the provisions fell slightly on account of stable asset quality.

To know more, check out J&K Bank's financial factsheet and latest quarterly results.

Jammu & Kashmir Bank Financials (FY21-25)

Particulars (in Rs Mn)	Mar-2021	Mar-2022	Mar-2023	Mar-2024	Mar-2025
Net Interest Income	37,712	39,116	47,458	52,053	57,998
Net Interest Margin (%)	46.50%	48.80%	50.70%	46.40%	46.20%
Gross NPA	1,844	1,520	1,475	1,487	1,577
Gross NPA (%)	719.00%	5.30%	4.60%	4.10%	3.80%
Net NPA	984	697	558	454	505
Net NPA (%)	4.00%	2.50%	1.80%	1.30%	1.30%
Provision Coverage Ratio (%)	82.00%	84.30%	86.20%	91.60%	90.30%

Source: Company Website

#5 Bank of India

Last on the list is Bank of India.

The bank has a five-year average gross NPA of 6.57% and an average net NPA of 1.54%.

Bank of India's loan book is dominated by agriculture, MSME, and retail loans. With respect to corporate loans, the majority of the rating profile is dominated by AAA-rated securities (72%), while the rest are rated below A.

In FY25, the bank's gross NPA and net NPA stood at 3.27% and 0.82% respectively. The slippages are also high for the year. However, due to write-offs and recoveries, the gross NPA and net NPA ratios reduced slightly compared to the previous year.

The management is positive about reducing its gross NPA and net NPAs further. For FY26, the net NPA guidance is 0.7%.

Coming to its financials, the net interest income and net profit grew at a CAGR of 11.4% and 35.6% in the last five years, whereas the provision levels have been maintained at Rs 78 bn.

To know more, check out Bank of India's financial factsheet and latest quarterly results.

Bank of India Financials (FY21-25)

Particulars (in Rs Mn)	Mar-2021	Mar-2022	Mar-2023	Mar-2024	Mar-2025
Net Interest Income	1,44,329	1,41,975	2,04,911	2,33,166	2,47,135
Net Interest Margin (%)	35.30%	37.10%	42.80%	38.20%	34.70%
Gross NPA	5,65,350	4,56,050	3,76,860	2,91,830	2,17,490
Gross NPA (%)	7.30%	10.00%	7.30%	5.00%	3.30%
Net NPA	1,22,620	98,520	80,540	68,450	53,590
Net NPA (%)	1.70%	2.30%	1.70%	1.20%	0.80%
Provision Coverage Ratio (%)	86.20%	87.80%	89.70%	90.60%	92.40%

Source: Company Website

Conclusion

We can see that the gross NPAs and net NPAs declined significantly over the last five years.

This is primarily because during the 2015-2018 period, the Reserve Bank of India (RBI) did an asset quality review, which helped in recognising a huge chunk of bad loans.

The RBI, banks, and the government have all taken steps to reduce NPA through capital infusions, aggressive write-offs, high provisions, recoveries under the Insolvency and Bankruptcy Code and improved lending practices.

Also, corporate deleveraging and a steadily growing economy further led to multi-year low NPAs.

That said, investors must be cautious of asset quality and NPAs of banks. It's better to consider banks with consistently growing net interest income and net profit, along with declining NPAs.

Happy investing.

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