GNPA (Gross NPA) — Banking Glossary · BankAI.fyi
Gross Non-Performing Assets — loans overdue by 90+ days as a % of total advances. The number every credit analyst watches obsessively. Lower is always better.
What is GNPA?
A loan becomes an NPA (Non-Performing Asset) when interest or principal is overdue for more than 90 days. The Gross NPA ratio expresses the total stock of such bad loans as a percentage of total advances.
GNPA Ratio = (Gross NPAs ÷ Total Advances) × 100
“Gross” means before subtracting provisions. That’s an important distinction from NNPA.
RBI’s NPA classification
Loans are classified progressively as they deteriorate:
| Classification | Days Overdue | Accounting Treatment |
|---|---|---|
| Standard | 0–89 days | No provision required |
| Sub-Standard | 90–364 days | 15% provision |
| Doubtful | 1–3 years | 25–100% provision |
| Loss | Beyond 3 years | 100% provision (write-off) |
GNPA vs NNPA — why both matter
GNPA is the headline number. NNPA (Net NPA) subtracts provisions already made:
NNPA = GNPA − Provisions
A bank with 3% GNPA but 80% Provision Coverage Ratio (PCR) is in much better shape than a bank with 2% GNPA and 50% PCR — because the first bank has already absorbed most of the pain.
Indian banking benchmarks (FY26)
| Bank | GNPA | NNPA | PCR |
|---|---|---|---|
| Kotak Mahindra | ~1.6% | ~0.4% | ~77% |
| HDFC Bank | ~1.4% | ~0.3% | ~79% |
| ICICI Bank | ~2.2% | ~0.5% | ~78% |
| Axis Bank | ~1.5% | ~0.3% | ~80% |
| SBI | ~2.1% | ~0.5% | ~76% |
Post FY16–18 NPA crisis, Indian banks have cleaned up significantly. GNPA levels today are at decade lows.
What credit analysts look for
Slippage ratio — the rate at which performing loans turn bad in a given quarter. A rising slippage rate is a leading indicator that GNPA will worsen.
Slippage Ratio = (Fresh NPAs added in period ÷ Opening standard advances) × 100
If GNPA is stable but slippages are accelerating, the bank may be recovering or writing off old NPAs faster than new ones appear — masking underlying deterioration.
Segment-level GNPA matters most
An aggregate GNPA of 2% can hide enormous divergence:
- Personal loans: 1.5% GNPA
- SME: 4% GNPA
- Agriculture: 8% GNPA
If a bank is aggressively growing SME and agricultural lending, aggregate GNPA might look good today — but the portfolio is seasoning risk that will show up in 12–18 months.
The SMA watch
Before loans turn NPA, they appear as SMA (Special Mention Accounts):
- SMA-0: Overdue 0–30 days
- SMA-1: Overdue 31–60 days
- SMA-2: Overdue 61–90 days
Banks with rising SMA-2 books are a quarter away from GNPA deterioration. RBI requires banks to report SMA data, but disclosure quality varies.