Mumbai, June 3 -- India's public sector lenders saw a sharp decline in bad assets in 2024-25, outpacing their private sector peers, who continued to add to their non-performing assets (NPA) pile amid rising stress in unsecured credit.

Data from Capitaline showed that PSUs 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 Rs.2.84 trillion in FY25, from Rs.3.4 trillion in FY24 and Rs.4.3 trillion in FY23. In comparison, private banks saw an increase in bad loans by around 2.9% to Rs.1.29 trillion in FY25, up from Rs.1.26 trillion in FY24 and Rs.1.22 trillion in FY23.

The analysis covered 19 private sector banks ...