{"id":16781,"date":"2026-10-29T12:17:38","date_gmt":"2026-10-29T06:47:38","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=16781"},"modified":"2026-10-27T12:19:30","modified_gmt":"2026-10-27T06:49:30","slug":"gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/","title":{"rendered":"GNPA vs. NNPA: How to Read Asset Quality Before Buying NBFC Bonds"},"content":{"rendered":"<div class=\"gpi-custom-widget-box\" style=\"border-left-color: #0066cc; background-color: #f0f7ff;\">\n<div class=\"gpi-custom-widget-title\" style=\"color: #0066cc;\">\ud83d\udcdd Quick Summary:<\/div>\n<h2 class=\"gpi-custom-widget-h2-content\"><span class=\"ez-toc-section\" id=\"Every_NBFC_bond_issuer_reports_two_asset_quality_numbers_GNPA_is_the_percentage_of_total_loans_that_have_turned_bad_unpaid_for_90_days_and_NNPA_is_that_percentage_after_accounting_for_the_money_set_aside_to_cover_those_losses_The_gap_between_the_two_shows_how_well-protected_the_lender_is\"><\/span><strong>Every NBFC bond issuer reports two asset quality numbers. GNPA is the percentage of total loans that have turned bad (unpaid for 90+ days), and NNPA is that percentage after accounting for the money set aside to cover those losses. The gap between the two shows how well-protected the lender is.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/div>\n\n\n<p>NBFC bonds and NCDs are popular with Indian investors looking for yields above bank fixed deposits, but higher yield comes with higher credit risk. The most direct way to judge that risk is the issuer\u2019s asset quality, and the two numbers you\u2019ll see everywhere are GNPA and NNPA.&nbsp;<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#Every_NBFC_bond_issuer_reports_two_asset_quality_numbers_GNPA_is_the_percentage_of_total_loans_that_have_turned_bad_unpaid_for_90_days_and_NNPA_is_that_percentage_after_accounting_for_the_money_set_aside_to_cover_those_losses_The_gap_between_the_two_shows_how_well-protected_the_lender_is\" >Every NBFC bond issuer reports two asset quality numbers. GNPA is the percentage of total loans that have turned bad (unpaid for 90+ days), and NNPA is that percentage after accounting for the money set aside to cover those losses. The gap between the two shows how well-protected the lender is.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#What_Are_GNPA_and_NNPA_in_NBFCs\" >What Are GNPA and NNPA in NBFCs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#Why_NNPA_Matters_More_for_NBFC_Bond_Investors\" >Why NNPA Matters More for NBFC Bond Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#GNPA_vs_NNPA_Quick_Comparison\" >GNPA vs. NNPA: Quick Comparison<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#Latest_NBFC_Asset_Quality_Trends_in_India\" >Latest NBFC Asset Quality Trends in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#What_Else_to_Check_Before_Buying_NBFC_Bonds\" >What Else to Check Before Buying NBFC Bonds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#How_to_Check_NBFC_Asset_Quality_Before_You_Invest\" >How to Check NBFC Asset Quality Before You Invest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#GNPA_vs_NNPA_Key_Takeaways_for_Bond_Investors\" >GNPA vs. NNPA: Key Takeaways for Bond Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#GNPA_vs_NNPA_FAQs\" >GNPA vs. NNPA FAQs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#Sources\" >Sources<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#Disclaimer\" >Disclaimer<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p>Many investors compare them without understanding what separates them. This guide explains GNPA vs. NNPA, how to read them for NBFC bonds in India, and what else to check before you invest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_GNPA_and_NNPA_in_NBFCs\"><\/span><strong>What Are GNPA and NNPA in NBFCs?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A loan becomes a non-performing asset (NPA) when interest or principal stays unpaid for more than 90 days. Gross NPA (GNPA) is the total value of such loans as a share of the lender\u2019s total loans. It\u2019s the raw measure of bad loans.<\/p>\n\n\n\n<p>Net NPA (NNPA) is what remains after subtracting the provisions the lender has already set aside for those bad loans. In simple terms, GNPA shows how big the problem is, and NNPA shows how much of it the lender hasn\u2019t yet absorbed.<\/p>\n\n\n\n<p>Take an NBFC with \u20b9100 of loans and a GNPA of 4%. If it has provided for 70% of those bad loans (\u20b92.8), its NNPA falls to about 1.2%. A second NBFC with the same 4% GNPA but only 30% provisioning would show an NNPA near 2.8%. The headline number is identical, but the second lender is far more exposed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_NNPA_Matters_More_for_NBFC_Bond_Investors\"><\/span><strong>Why NNPA Matters More for NBFC Bond Investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Bondholders are repaid from the lender\u2019s earnings and capital. A high NNPA means unprovided losses still sit on the balance sheet, and those can eat into net worth if recoveries disappoint. A rising NNPA, or a widening gap between GNPA and NNPA, deserves attention.<\/p>\n\n\n\n<p>Larger NBFCs that follow Ind AS (the modern accounting standard) report these as Stage 3 and Net Stage 3 assets. The idea is the same, so don\u2019t be thrown by the labels.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GNPA_vs_NNPA_Quick_Comparison\"><\/span><strong>GNPA vs. NNPA: Quick Comparison<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Parameter<\/strong><\/td><td><strong>GNPA<\/strong><\/td><td><strong>NNPA<\/strong><\/td><\/tr><tr><td>What it measures<\/td><td>Bad loans as % of total loans<\/td><td>Bad loans after deducting provisions<\/td><\/tr><tr><td>What it tells you<\/td><td>Size of the problem<\/td><td>Unprotected portion of the problem<\/td><\/tr><tr><td>Affected by provisioning?<\/td><td>No<\/td><td>Yes<\/td><\/tr><tr><td>Can it mislead?<\/td><td>If write-offs are heavy<\/td><td>If provisioning is thin<\/td><\/tr><tr><td>Best read with<\/td><td>Provision Coverage Ratio (PCR)<\/td><td>GNPA and capital adequacy<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<p><strong>L(earn) More:<\/strong><\/p>\n\n\n<ul class=\"wp-block-latest-posts__list is-grid columns-3 wp-block-latest-posts\"><li><div class=\"wp-block-latest-posts__featured-image aligncenter\"><a href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/\" aria-label=\"GNPA vs. NNPA: How to Read Asset Quality Before Buying NBFC Bonds\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"GNPA vs NNPA Explained\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/\">GNPA vs. NNPA: How to Read Asset Quality Before Buying NBFC Bonds<\/a><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image aligncenter\"><a href=\"https:\/\/goldenpi.com\/blog\/guide\/asset-liability-mismatch-in-nbfcs-hidden-liquidity-risks-for-bond-investors\/\" aria-label=\"Asset-Liability Mismatch in NBFCs: Hidden Liquidity Risks for Bond Investors\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"Asset-Liability Mismatch in NBFCs\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26124627\/Asset-Liability-Mismatch-in-NBFCs.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/guide\/asset-liability-mismatch-in-nbfcs-hidden-liquidity-risks-for-bond-investors\/\">Asset-Liability Mismatch in NBFCs: Hidden Liquidity Risks for Bond Investors<\/a><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image aligncenter\"><a href=\"https:\/\/goldenpi.com\/blog\/bond-news\/ais-and-form-26as-for-bond-investors-how-to-reconcile-coupon-tds\/\" aria-label=\"AIS and Form 26AS for Bond Investors: How to Reconcile Coupon TDS\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"AIS and Form 26AS for Bond Investors\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/26130634\/AIS-and-Form-26AS-for-Bond-Investors.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/ais-and-form-26as-for-bond-investors-how-to-reconcile-coupon-tds\/\">AIS and Form 26AS for Bond Investors: How to Reconcile Coupon TDS<\/a><\/li>\n<\/ul>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Latest_NBFC_Asset_Quality_Trends_in_India\"><\/span><strong>Latest NBFC Asset Quality Trends in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The sector\u2019s asset-quality indicators remain broadly encouraging. The RBI\u2019s June 2026 Financial Stability Report recorded a GNPA ratio of 2.4% for its sample of 174 NBFCs as of March 2026 <sup>[1]<\/sup>. This was lower than the approximately 2.9% reported a year earlier, although differences in sample composition should be considered when comparing the figures. June-quarter FY27 results also pointed to broadly stable asset quality across most NBFCs, according to analysts.<\/p>\n\n\n\n<p>But sector-wide numbers can hide problems at individual lenders. The RBI has raised concerns about growing household debt and the rapid rise in gold loans. Loans against gold jewelry issued by NBFCs grew 69.9% year-on-year to \u20b93.29 lakh crore in May 2026 <sup>[2]<\/sup>.<\/p>\n\n\n\n<p>IIFL Finance shows why this trend needs watching. Its gold loan portfolio grew 90% year-on-year to \u20b965,729 crore in September 2026. At the same time, the share of gold loans where borrowers had fallen behind on payments rose to 0.90%, from 0.12% a year earlier. Although this remains below 1%, the increase suggests that missed payments are becoming more common as the business expands.<\/p>\n\n\n\n<p>Higher borrowing costs and further interest rate increases could also put pressure on lenders\u2019 profits, leaving them with less room to absorb losses if more borrowers struggle to repay.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Else_to_Check_Before_Buying_NBFC_Bonds\"><\/span><strong>What Else to Check Before Buying NBFC Bonds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A clean NPA ratio can be flattered by write-offs or delayed recognition. Look at:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Provision Coverage Ratio (PCR):<\/strong> The share of bad loans already provided for. Higher is generally more comfortable.<\/li>\n\n\n\n<li><strong>Stage 2 assets:<\/strong> Loans that are 30-90 days overdue or showing stress. These are tomorrow\u2019s Stage 3 candidates.<\/li>\n\n\n\n<li><strong>Write-offs and restructuring:<\/strong> Heavy write-offs can make GNPA look better than reality.<\/li>\n\n\n\n<li><strong>Capital adequacy ratio (CRAR):<\/strong> The RBI sets a minimum of 15% for most NBFCs, and a comfortable cushion above that absorbs shocks.<\/li>\n\n\n\n<li><strong>Loan mix:<\/strong> Secured loans like home or vehicle finance behave differently from unsecured or microfinance lending.<\/li>\n\n\n\n<li><strong>Funding profile:<\/strong> Heavy reliance on short-term or market borrowings can create liquidity stress even when NPAs look fine.<\/li>\n\n\n\n<li><strong>Credit rating and outlook:<\/strong> Read the rating agency\u2019s rationale (CRISIL, ICRA, CARE, India Ratings), not just the letters.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Check_NBFC_Asset_Quality_Before_You_Invest\"><\/span><strong>How to Check NBFC Asset Quality Before You Invest<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Start with the issuer\u2019s latest quarterly results or investor presentation, which usually disclose GNPA, NNPA, PCR and Stage 2 numbers. Look at four to six quarters to spot trends instead of relying on one snapshot. Compare the issuer with peers in the same lending segment, not with the sector average. Finally, match the bond\u2019s tenure to how long you can stay invested, since secondary-market liquidity for <a href=\"https:\/\/goldenpi.com\/collections\/nbfc-bonds\">NBFC bonds<\/a> can be thin.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GNPA_vs_NNPA_Key_Takeaways_for_Bond_Investors\"><\/span><strong>GNPA vs. NNPA: Key Takeaways for Bond Investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>GNPA tells you how large the problem is, and NNPA tells you how much of it the lender hasn\u2019t yet cushioned. Neither is enough alone. Read them together with provisioning, capital strength, loan mix and ratings, and you\u2019ll have a clearer view of the risk behind that attractive coupon.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GNPA_vs_NNPA_FAQs\"><\/span><strong>GNPA vs. NNPA FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1793010091996\"><strong class=\"schema-faq-question\">Q1. <strong>What is GNPA in an NBFC?<\/strong><\/strong> <p class=\"schema-faq-answer\">Gross Non-Performing Assets (GNPA) represent the total value of loans classified as non-performing before deducting provisions for potential losses. The GNPA ratio measures these loans as a percentage of gross advances.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793010111434\"><strong class=\"schema-faq-question\">Q2. <strong>What is NNPA in an NBFC?<\/strong><\/strong> <p class=\"schema-faq-answer\">Net Non-Performing Assets (NNPA) reflect non-performing loans after deducting the provisions and other adjustments prescribed for the calculation. The NNPA ratio indicates the remaining NPA exposure relative to the relevant net advances measure.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793010419626\"><strong class=\"schema-faq-question\">Q3. <strong>How are GNPA and NNPA ratios calculated?<\/strong><\/strong> <p class=\"schema-faq-answer\">The GNPA ratio is generally calculated as gross NPAs divided by gross advances, multiplied by 100. The NNPA ratio uses net NPAs divided by net advances, multiplied by 100. Check the issuer\u2019s disclosures for the precise calculation and adjustments used.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793010430680\"><strong class=\"schema-faq-question\">Q4. <strong>Why is GNPA usually higher than NNPA?<\/strong><\/strong> <p class=\"schema-faq-answer\">GNPA is measured before deducting eligible provisions, while NNPA reflects the effect of those deductions. NNPA is therefore generally lower than GNPA when provisions and other permitted adjustments are positive.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793010441529\"><strong class=\"schema-faq-question\">Q5. <strong>Can an NBFC have high GNPA but low NNPA?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes. If an NBFC has recognised substantial provisions against its NPAs, its NNPA can be much lower than its GNPA. Investors should check whether the provisions adequately reflect likely losses and whether the company has the earnings and capital to absorb any additional deterioration.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793010451398\"><strong class=\"schema-faq-question\">Q6. <strong>Where can investors find an NBFC\u2019s GNPA and NNPA figures?<\/strong><\/strong> <p class=\"schema-faq-answer\">Check the NBFC\u2019s annual report, quarterly or half-yearly financial results, investor presentations and applicable regulatory disclosures. Look for the reporting date, gross and net NPA amounts, the ratios, provisioning coverage and any explanations of significant movements.<\/p> <\/div> <\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sources\"><\/span><strong>Sources<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a rel=\"nofollow\" href=\"https:\/\/www.rbi.org.in\/Scripts\/PublicationReportDetails.aspx?UrlPage=&amp;ID=1325\">RBI \u2014 Financial Stability Report, June 2026, Chapter II: Financial Institutions: Soundness and Resilience<\/a><\/li>\n\n\n\n<li><a rel=\"nofollow\" href=\"https:\/\/economictimes.indiatimes.com\/industry\/banking\/finance\/nbfcs-gold-loans-jump-nearly-70-pc-in-may-fastest-across-segments-rbi-data\/articleshow\/132240830.cms\">The Economic Times \u2014 NBFCs\u2019 gold loans jump nearly 70% in May, fastest across segments: RBI data<\/a><\/li>\n<\/ol>\n\n\n<div class=\"gpi-custom-widget-box\" style=\"border-left-color: #0066cc; background-color: #f0f7ff;\">\n<div class=\"gpi-custom-widget-title\" style=\"color: #0066cc;\">Ready to Invest?<\/div>\n<div class=\"gpi-custom-widget-content\">\n<p>Visit <a href=\"https:\/\/goldenpi.com\/\">GoldenPi<\/a> to explore current bond options. Compare yields, ratings, and tenures in one place and invest online with as little as \u20b930,000.<\/p>\n<\/div>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disclaimer\"><\/span>Disclaimer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities and municipal debt securities\/securitized debt instruments are subject to credit risks, market risks, and default risks, including delay and\/or default in payment. Read all the offer-related documents carefully. This blog\/article should not be construed as financial advice or as an offer or recommendation to buy or sell any security or any products\/services of\/on GoldenPi or any product\/services of its third-party client(s). For a detailed calculation of YTM, visit our website.&nbsp;<a href=\"https:\/\/delivery.goldenpi.com\/XPRBSN?id=162365=ch0GCFVXBVBUH1QDUlZXUlgBVgNSUwJVWgQGDFJQAVsEUwRfBldSBFVUAglRBFJSAA0ZBgxfQFBbERxBFSNTV10FU1cTDBgFDg5OAFIKVVFQBlZTVwQBBgFSAg0aC0BMQRIMFkwBUwoIFVdDHBwCCw1QAAsTWBpSVwgebDYxdmt\/Xl9dHxMF&amp;fl=WRVCSRBfGUkETltfVwNLAxVbCQwNWhpYVkpFGwMOBRcEWQMNUEoHSQJaV1BQAQQHTAZXA1IcAAMOBBxWB1IMFQUEVQxXXAEFBVQEUkpTVlMCUFEHU1JVAwhUAFECAQZaVFEADVAAVQBXVFRUUw==\" target=\"_blank\" rel=\"noreferrer noopener\">T&amp;C\u2019s Apply<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udcdd Quick Summary: Every NBFC bond issuer reports two asset quality numbers. GNPA is the percentage of total loans that have turned&hellip;<\/p>\n","protected":false},"author":16,"featured_media":16817,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[1026,25],"tags":[],"class_list":["post-16781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guide","category-bond-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GNPA vs NNPA Explained: How to Assess NBFC Asset Quality Before Buying Bonds<\/title>\n<meta name=\"description\" content=\"Understand GNPA vs NNPA and how these ratios measure an NBFC\u2019s asset quality. 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Learn how to interpret rising NPAs, provisioning and credit risk before investing in NBFC bonds.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/\" \/>\n<meta property=\"og:site_name\" content=\"GoldenPi | Blogs\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/goldenpitech\" \/>\n<meta property=\"article:published_time\" content=\"2026-10-29T06:47:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/10\/27121853\/GNPA-vs-NNPA-Explained.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Kunal Arora | CA\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@GoldenPiTech\" \/>\n<meta name=\"twitter:site\" content=\"@GoldenPiTech\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kunal Arora | CA\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/\"},\"author\":{\"name\":\"Kunal Arora | CA\",\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/#\\\/schema\\\/person\\\/d3fccd8baf9a3fda41c1c5356272ce8d\"},\"headline\":\"GNPA vs. NNPA: How to Read Asset Quality Before Buying NBFC Bonds\",\"datePublished\":\"2026-10-29T06:47:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/\"},\"wordCount\":1344,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d2zny4996dl67j.cloudfront.net\\\/blogs\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/27121853\\\/GNPA-vs-NNPA-Explained.jpg\",\"articleSection\":[\"Guide\",\"Bond News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#respond\"]}]},{\"@type\":[\"WebPage\",\"FAQPage\"],\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/\",\"url\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/\",\"name\":\"GNPA vs NNPA Explained: How to Assess NBFC Asset Quality Before Buying Bonds\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d2zny4996dl67j.cloudfront.net\\\/blogs\\\/wp-content\\\/uploads\\\/2026\\\/10\\\/27121853\\\/GNPA-vs-NNPA-Explained.jpg\",\"datePublished\":\"2026-10-29T06:47:38+00:00\",\"description\":\"Understand GNPA vs NNPA and how these ratios measure an NBFC\u2019s asset quality. 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As a Financial Controller at Oxyzo, Kunal focuses on the core pillars of financial integrity - transparency, regulatory excellence and the strategic reporting that builds investor trust.\",\"sameAs\":[\"https:\\\/\\\/www.linkedin.com\\\/in\\\/ca-kunal-arora-005299158\\\/\"],\"url\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/author\\\/kunal-arora\\\/\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#faq-question-1793010091996\",\"position\":1,\"url\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#faq-question-1793010091996\",\"name\":\"Q1. What is GNPA in an NBFC?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Gross Non-Performing Assets (GNPA) represent the total value of loans classified as non-performing before deducting provisions for potential losses. 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The NNPA ratio indicates the remaining NPA exposure relative to the relevant net advances measure.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#faq-question-1793010419626\",\"position\":3,\"url\":\"https:\\\/\\\/goldenpi.com\\\/blog\\\/guide\\\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\\\/#faq-question-1793010419626\",\"name\":\"Q3. How are GNPA and NNPA ratios calculated?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The GNPA ratio is generally calculated as gross NPAs divided by gross advances, multiplied by 100. The NNPA ratio uses net NPAs divided by net advances, multiplied by 100. 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As a Financial Controller at Oxyzo, Kunal focuses on the core pillars of financial integrity - transparency, regulatory excellence and the strategic reporting that builds investor trust.","sameAs":["https:\/\/www.linkedin.com\/in\/ca-kunal-arora-005299158\/"],"url":"https:\/\/goldenpi.com\/blog\/author\/kunal-arora\/"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010091996","position":1,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010091996","name":"Q1. What is GNPA in an NBFC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Gross Non-Performing Assets (GNPA) represent the total value of loans classified as non-performing before deducting provisions for potential losses. The GNPA ratio measures these loans as a percentage of gross advances.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010111434","position":2,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010111434","name":"Q2. What is NNPA in an NBFC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Net Non-Performing Assets (NNPA) reflect non-performing loans after deducting the provisions and other adjustments prescribed for the calculation. The NNPA ratio indicates the remaining NPA exposure relative to the relevant net advances measure.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010419626","position":3,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010419626","name":"Q3. How are GNPA and NNPA ratios calculated?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"The GNPA ratio is generally calculated as gross NPAs divided by gross advances, multiplied by 100. The NNPA ratio uses net NPAs divided by net advances, multiplied by 100. Check the issuer\u2019s disclosures for the precise calculation and adjustments used.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010430680","position":4,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010430680","name":"Q4. Why is GNPA usually higher than NNPA?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"GNPA is measured before deducting eligible provisions, while NNPA reflects the effect of those deductions. NNPA is therefore generally lower than GNPA when provisions and other permitted adjustments are positive.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010441529","position":5,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010441529","name":"Q5. Can an NBFC have high GNPA but low NNPA?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes. If an NBFC has recognised substantial provisions against its NPAs, its NNPA can be much lower than its GNPA. Investors should check whether the provisions adequately reflect likely losses and whether the company has the earnings and capital to absorb any additional deterioration.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010451398","position":6,"url":"https:\/\/goldenpi.com\/blog\/guide\/gnpa-vs-nnpa-how-to-read-asset-quality-before-buying-nbfc-bonds\/#faq-question-1793010451398","name":"Q6. Where can investors find an NBFC\u2019s GNPA and NNPA figures?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Check the NBFC\u2019s annual report, quarterly or half-yearly financial results, investor presentations and applicable regulatory disclosures. Look for the reporting date, gross and net NPA amounts, the ratios, provisioning coverage and any explanations of significant movements.","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/posts\/16781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/comments?post=16781"}],"version-history":[{"count":3,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/posts\/16781\/revisions"}],"predecessor-version":[{"id":16816,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/posts\/16781\/revisions\/16816"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/media\/16817"}],"wp:attachment":[{"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/media?parent=16781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/categories?post=16781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goldenpi.com\/blog\/wp-json\/wp\/v2\/tags?post=16781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}