New Delhi, June 3 -- There was a time when the gross non-performing assets (NPA) and net NPAs of major banks were around 11% and 6%, respectively. Today, those numbers have drastically improved, with gross NPAs down to around 2% and net NPAs at just 0.3%.

The significant improvement is due to the government's intervention to improve the banking system through measures such as loan write-offs, recovery drives, and recapitalisation, all of which have helped banks clean up their balance sheets and improve profitability.

So what are NPAs, and why do they matter?

NPAs or non-performing assets are loans and advances given by a bank to its customers that are default or close to being in default.

Gross NPAs are the total sum of loans outstand...