Gross NPA ratio
Gross Non-Performing Assets
Gross NPA is the share of a bank's total loans on which interest or principal has been overdue for more than 90 days, before any provisions are deducted.
Formula
Gross NPA
Gross NPA (%) = Gross Non-Performing Loans ÷ Total Advances × 100
Benchmark: Lower is better; the gap between gross and net NPA shows how much has been provided for
Reading the number
Gross NPA is the raw damage: every loan that has stopped performing, at full value. Net NPA is what remains after the bank has set aside provisions against those loans. The notes are clear that net NPA is the figure to focus on, because it is what still threatens capital. But gross NPA is where the story starts, and the relationship between the two is its own signal.
A bank with a high gross NPA and a low net NPA has recognised its bad loans and provided for them; the pain is in the past. A bank with gross and net NPA close together has recognised the loans but not yet paid for them; the pain is still coming. Gross NPA rising quarter after quarter means new loans are going bad faster than old ones are being resolved.
Indian example
Related ratios
Glossary terms
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