<h1>Government and RBI reforms cut public sector bank NPAs from 9.11% to 2.58% through comprehensive measures</h1> Government and RBI implemented comprehensive measures resulting in significant reduction of gross non-performing assets in public sector banks from 9.11% in March 2021 to 2.58% in March 2025. Key reforms included changes to credit culture through the Insolvency and Bankruptcy Code, which altered creditor-borrower relationships and removed control from defaulting company promoters. Amendments were made to debt recovery legislation, and Debt Recovery Tribunal jurisdiction increased from Rs. 10 lakhs to Rs. 20 lakhs. Banks established specialized stressed asset management verticals and adopted business correspondent models. RBI issued prudential frameworks for early recognition and resolution of stressed assets. Property valuation procedures were strengthened with mandatory independent valuers, minimum two valuations for properties above Rs. 50 crore, and three-yearly revaluations. E-auction mechanisms were promoted for better price discovery in asset disposal.