The asset quality of Indian banks is expected to further improve over the next year, providing cushion against pressure on margins, liquidity and credit growth arising from geopolitical tensions and broader macroeconomic uncertainties. According to consensus estimates compiled by S&P Global Market Intelligence, the gross non-performing asset (NPA) ratio of State Bank of India is seen declining to 0.92% by March 2027 from 0.96% at the end of FY26. HDFC Bank‘s bad loan ratio is projected to improve to 0.76% from 0.78%.