New Delhi, June 14 -- Non-performing assets (NPAs) in India's banking system are likely to increase slightly in the first half of FY26, mainly due to rising stress in the retail loan segment, particularly unsecured personal and microfinance loans, according to a report by CareEdge Ratings.

The report projected that the Gross NPA (GNPA) ratio for Scheduled Commercial Banks (SCBs) will see a marginal uptick from 2.3 per cent at the end of FY25 to around 2.3-2.4 per cent by the end of FY26.

It said "with the personal loans segment facing stress, especially unsecured personal and microfinance loans, the overall fresh slippages are expected to rise.... NPAs continued downward trend in FY25, potential uptick anticipated FY26 onwards".

Althou...