The financial services firm’s assessment presents a positive picture of the banking sector’s financial health. It highlighted gross non-performing assets, or gross NPAs, at levels close to historical lows, alongside a strong capital cushion.

Gross NPAs are a measure of problem loans on banks’ books. Their low level is an important part of the report’s assessment, but it is not the only factor cited. Motilal Oswal also pointed to improved profitability and the work done to repair balance sheets.

Taken together, these factors underpin its view that banks are in a better position than at any point over the past decade. The report described a marked improvement in asset quality, with resilient capital adding to the sector’s financial strength.

The supplied report gives a sector-wide assessment rather than a bank-by-bank comparison. It does not provide exact gross NPA figures, capital ratios or profitability numbers. That means the broad positive view cannot, on the information available, be used to judge the position of any particular lender.