PSU banks outshine pvt peers in bad loan recovery

India's public sector lenders saw a sharp decline in bad assets in 2024-25, outpacing their private sector peers, which continued to add to their non-performing assets (NPA) pile amid rising stress in unsecured credit.

- Abirami Sekar

MUMBAI:

Data from Capitaline showed that public sector undertaking (PSU) banks reported a drop in total bad assets—loans where repayments are overdue by over 90 days—in FY25 and FY24. Bad loans of public sector banks decreased 16% year-on-year (y-o-y) to ₹2.84 lakh crore in FY25, from ₹3.4 lakh crore in FY24 and ₹4.3 lakh crore in FY23. In comparison, private banks saw an increase in bad loans by around 2.9% to ₹1.29 lakh crore in FY25, up from ₹1.26 lakh crore in FY24 and ₹1.22 lakh crore in FY23.

The analysis covered 19 private sector banks and 12 public sector banks.