TL;DR: India’s Non-Performing Asset (NPA) recovery landscape shows a major post-pandemic rebound. While Lok Adalats dominate in volume, mechanisms like the Insolvency and Bankruptcy Code (IBC) and SARFAESI Act deliver most of the actual recoveries. The overall recovery rate has improved, signalling better financial discipline and more efficient resolution strategies by banks.

Context:

An NPA is a loan or advance where the borrower has failed to make interest or principal payments for a specified period, typically 90 days per RBI guidelines. Once classified as an NPA, the asset ceases to generate income, posing financial risks to the bank. To manage this, banks must implement board-approved recovery policies tailored to the borrower’s situation. Common resolution strategies include legal action through Debt Recovery Tribunals (DRT) or seizing collateral via the SARFAESI Act. For large-scale corporate defaults, the Insolvency and Bankruptcy Code (IBC) provides a structured framework for restructuring or liquidation.

Who compiles this data?

The data has been drawn from the Reserve Bank of India’s annual Report on Trend and Progress of Banking in India. The report is published in accordance with Section 36 (2) of the Banking Regulation Act, 1949 and details the banking industry’s performance, including cooperative banks and non-bank financial institutions.

Where can I download clean & structured data related to NPAs, Write-Offs and Recovery?

Clean, structured, and ready-to-use datasets related to NPAs, Write-Offs and Recovery can be downloaded from the collection on Dataful. The collection includes bank-, bank-group- and sector-wise information on new accretion to NPAs, actual recoveries and write-offs, gross NPAs, gross advances and NPA ratios, the number of NPA accounts, and year-wise NPA recoveries through resolution channels such as Lok Adalats, DRTs, SARFAESI and the IBC.

Key Insights

• There was a sharp 66% decline in total case referrals during the 2020-21 pandemic year. However, this was followed by a massive surge, reaching record highs of 1.5 crore cases in 2024-25, indicating an aggressive post-pandemic push by banks to clear backlogs and recover dues.

• Lok Adalats have become the primary mechanism for managing NPA volumes. From 2012-13 to 2024-25, the number of cases referred to Lok Adalats increased from roughly 8.4 lakh to nearly 1.5 crore, now accounting for over 98% of all referred cases.

• While Lok Adalats handle the sheer volume, specialised legal frameworks like the SARFAESI Act and DRTs maintain a steady presence, handling hundreds of thousands of cases.

• The total recovery rate across all mechanisms has seen a positive trend since the pandemic years, reaching 18% in 2024-25. Banks successfully recovered over ₹1.04 lakh crore in the latest fiscal year out of a total of ₹5.79 lakh crore involved in these processes.

• While Lok Adalats handle more cases, the bulk of the actual cash is recovered through corporate-focused laws. In 2024-25, IBC recovered ₹54,528 crore, and the SARFAESI Act recovered ₹32,466 crore, together accounting for over 80% of the total recovered amount. Meanwhile, Lok Adalats involve the largest total sum of money (₹1,97,907 crore in 2024-25), but they have the lowest recovery rate at just 2.4%.

• IBC has consistently been India’s most effective recovery channel, maintaining an all-time average success rate of approximately 36%. While the pandemic caused a temporary performance dip to 20.2% in 2020-21, the mechanism has rebounded to reach a recovery rate of 36.6% in 2024-25.

Why Does It Matter?

Recovering NPAs is critical for the stability of India’s banking sector. High default levels lock up capital that could otherwise support new lending and economic growth. Improved recovery through mechanisms like the IBC and SARFAESI Act reflects stronger financial discipline, better risk management, and a more accountable credit ecosystem. Tracking these trends helps assess how effectively banks are cleaning up balance sheets and restoring credit flow to productive sectors.

Key numbers

• NPA cases referred: 50.8 lakh (2018–19) → 1.5 crore (2024–25)

• Overall recovery rate: 20.2% (2020–21) → 18.0% (2024–25)

• Amount recovered: ₹0.64 lakh crore (2020–21) → ₹1.04 lakh crore (2024–25)

• IBC recovery rate: 20.2% (2020–21) → 36.6% (2024–25)

• Lok Adalats share of total cases: 98% (2024–25)