---
title: "Gross NPA vs Net NPA: Key Difference | Model Diplomat"
description: "Gross NPA versus Net NPA distinguishes total bad loans from those after provisions, crucial for understanding bank health in UPSC exams."
url: "https://modeldiplomat.com/learn/glossary/gross-vs-net-npa"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Gross NPA is the total value of a bank's non-performing loans, while Net NPA is that amount minus provisions the bank has set aside against those loans.
- What is the core formula difference between Gross NPA and Net NPA?
- Why can a bank have a high Gross NPA but a low Net NPA?
- When does a loan become an NPA under RBI norms?
- How does Net NPA relate to the Prompt Corrective Action framework?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Gross NPA is the total value of a bank's non-performing loans, while Net NPA is that amount minus provisions the bank has set aside against those loans.

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In its 2015 Asset Quality Review, the Reserve Bank of India under Governor Raghuram Rajan forced public sector banks to reclassify evergreened loans, pushing India's Gross NPA ratio toward a peak near 11.2 percent by March 2018.

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