Banking sector trends and progress in India in 2024-25
This is positive news for the banking sector. In its Trends and Progress of Banking in India 2024–25 report, the Reserve Bank of India stated that the Indian banking system remains robust. Banks’ balance sheets strengthened during FY25, supported by double-digit growth in both deposits and credit. Asset quality also showed continued improvement. The RBI noted that the banking sector sustained its strong momentum in FY25, recording double-digit balance sheet expansion.
According to this report, deposits and credit growth in scheduled commercial banks remained in double digits, although lower than in FY24. The Capital to Risk-Weighted Assets Ratio of scheduled commercial banks stood at 17.4 percent in March and 17.2 percent in September.
Banks have seen an improvement in asset quality. Gross NPAs have been at their lowest level in several decades, standing at 2.2 percent in March and 2.1 percent in September. Profitability remained strong in FY25, with a return on assets of 1.4 percent and a return on equity of 13.5 percent. Urban cooperative banks witnessed healthy balance sheet growth, and their asset quality improved for the fourth consecutive year. Non-banking financial companies (NBFCs) experienced double-digit credit growth, maintained robust capital buffers, and saw an improvement in asset quality.
