Tripura banking sector shows improved asset quality with gross NPA ratio falling to 4.19 percent and CD ratio reaching 57 percent. MSME lending strengthens while agriculture and government schemes reflect mixed stress trends in latest SLBC report.
Banking indicators in Tripura showed modest improvement toward the end of 2025, reflecting gradual strengthening in asset quality even as lending activity expanded across sectors. Fresh data presented in the 154th State Level Bankers’ Committee (SLBC) meeting highlighted a decline in the gross non-performing assets (NPA) ratio to 4.19 percent as of December 31, 2025, compared to 4.74 percent recorded a year earlier.
In absolute terms, gross NPAs dropped to Rs 997.54 crore from Rs 1,048.73 crore, indicating improved recovery and better credit discipline among borrowers. This decline came alongside a noticeable rise in total lending, suggesting that banks have managed to balance credit growth with risk control measures.
Sectoral trends, however, revealed a mixed picture. Credit flow to agriculture and allied activities increased to Rs 4,793.74 crore from Rs 4,663.42 crore, underscoring continued emphasis on rural financing. Despite this growth, NPAs in the agriculture segment rose to Rs 368.28 crore from Rs 346.99 crore, pushing the NPA ratio slightly higher to 7.68 percent. The rise indicates persistent stress in farm-linked activities, possibly due to market volatility and climate-related challenges.
In contrast, the micro, small, and medium enterprises (MSME) sector delivered a more encouraging performance. Outstanding advances in this segment surged to Rs 5,931.37 crore from Rs 4,917.42 crore. At the same time, NPAs declined to Rs 327.18 crore from Rs 379.58 crore, reducing the NPA ratio to 5.52 percent. The improvement suggests stronger repayment capacity and healthier business conditions for small enterprises.
The ‘other priority sector’ category also showed stable progress. Outstanding loans rose significantly to Rs 2,926.43 crore from Rs 2,382.87 crore, while NPAs remained nearly unchanged at around Rs 86 crore. This stability contributed to a reduction in the NPA ratio to 2.93 percent, reflecting better asset quality in segments such as education, housing, and weaker sections.
Overall, priority sector lending recorded a robust increase. Aggregate advances climbed to Rs 13,651.53 crore as of December 2025 from Rs 11,963.71 crore in the previous year. Meanwhile, NPAs in this segment declined to Rs 781.34 crore from Rs 812.36 crore, bringing the ratio down to 5.72 percent. This trend indicates improved credit management despite higher exposure.
Scheme-wise performance varied across government-backed initiatives. Under the Kisan Credit Card (KCC) scheme, loan outstanding increased to Rs 974.59 crore from Rs 924.22 crore. However, NPAs rose sharply to Rs 239.69 crore, pushing the NPA ratio to 24.59 percent, signaling elevated stress in short-term agricultural credit.
The Prime Minister’s Employment Generation Programme (PMEGP) recorded a decline in total outstanding credit to Rs 200.20 crore from Rs 209.66 crore. Encouragingly, NPAs also fell to Rs 57.61 crore, improving the NPA ratio to 28.78 percent.
The Swavalamban scheme witnessed a contraction in both loan outstanding and NPAs, which fell to Rs 211.70 crore and Rs 67.48 crore respectively. However, the NPA ratio increased to 31.87 percent, indicating that the remaining loan portfolio continues to face repayment challenges.
Under the Pradhan Mantri Mudra Yojana (PMMY), lending rose to Rs 3,357.93 crore from Rs 3,304.02 crore. NPAs also increased to Rs 448.37 crore, pushing the NPA ratio slightly higher to 12.67 percent, suggesting moderate stress in micro-enterprise financing.
The credit-deposit (CD) ratio of the state stood at 57 percent as of December 31, 2025, reflecting a marginal improvement. Total deposits were reported at Rs 46,401.19 crore, while advances utilized within the state reached Rs 23,844.21 crore. Including additional support from RIDF and NEDFI amounting to Rs 2,553.50 crore, total advances considered for CD ratio calculation stood at Rs 26,397.71 crore.
Despite the improvement, the report emphasized the need to push the CD ratio beyond 60 percent in the next financial year. Strengthening credit flow to MSMEs and expanding retail lending were identified as key strategies to achieve this target.
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Meanwhile, the banking network in the state expanded steadily. The number of branches increased to 618 from 604 a year earlier, with new branches distributed across rural, semi-urban, and urban areas. This expansion is expected to enhance financial inclusion and support further credit growth.
Overall, the latest banking data presents a cautiously optimistic outlook. While asset quality has improved and lending has grown, sector-specific stress—particularly in agriculture and certain government schemes—continues to require focused policy and institutional attention.
