Gross non-performing assets

Loans on which the borrower has stopped paying, as a percentage of the total loan book, before deducting any provision the bank has made against them.

A bank with ₹1,260 crore of bad loans on a ₹42,000 crore book reports a gross figure of 3%.

Indian classification follows a defined progression. An account overdue beyond ninety days becomes non-performing, and it then moves through sub-standard, doubtful and loss categories as time passes, with higher provisioning required at each step.

Below 3% is generally considered healthy for an Indian bank. The direction matters more than the level, because recognition of a bad loan lags the borrower's deterioration and a rising number means the earlier optimism is being corrected.

Read it beside slippages, which lead it.

Ninety days. That is the line.

The classification also drives the provisioning, which is what connects asset quality to reported profit. A sub-standard account requires a lower provision than a doubtful one, and a doubtful account's requirement rises the longer it stays there, so a bank that is not recovering or writing off its old bad loans faces a rising provision charge from accounts that turned bad years ago. That is why the ageing of the bad-loan book matters as much as its size, and why a bank with a stable gross figure can still see credit costs climb.