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Double-Digit Growth, Falling NPAs Strengthen Indian Banks In 2024–25: RBI
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Indian commercial banks showed resilience in 2024-25, with double-digit growth, improved asset quality, and strong profitability, as highlighted in the RBI report.
Banks, NBFCs, Co-ops Show Broad-Based Strength in 2024–25: RBI Report
Despite global headwinds, the Indian commercial banking sector remained resilient during 2024-25, supported by double-digit balance sheet expansion, according to the Reserve Bank of India’s (RBI’s) report on Trend and Progress of Banking in India 2024-25.
Deposits and credit of scheduled commercial banks (SCBs) grew in double digits, albeit with a moderation from the previous year, the report highlighted.
The Indian banking system saw an improvement in asset quality, with the gross non-performing assets (GNPA) ratio declining to a multi-decadal low of 2.2 per cent at end-March 2025 and 2.1 per cent at end-September 2025.
Not only the asset quality but the profitability of SCBs remained robust with the return on assets (RoA) at 1.4 per cent and return on equity (RoE) at 13.5 per cent in 2024-25. The RBI report added that During H1: 2025-26, RoA and RoE of the SCBs stood at 1.3 per cent and 12.5 per cent, respectively.
The growth didn’t remain at the Scheduled Commercial Banks (SCBs). The consolidated balance sheet of urban co-operative banks recorded higher growth in 2024-25 than that in the previous year. Their asset quality improved for the fourth consecutive year, alongside strengthening of their capital buffers and profitability, the report added.
The non-banking financial companies continued to record double-digit credit growth along with robust capital buffers. Their asset quality also improved during the year.
Plans To Build Robust Financial System And Consumer Protection
In the report, the Central Bank said the climate risk poses a threat to financial stability. It plans to include climate risk disclosure norms and RBI Climate Risk Information System (RB-CRIS).
Banks were told to build climate risk into strategy and lending.
Reflecting policy efforts across the financial system, the Reserve Bank’s financial inclusion index improved to 67.0 in March 2025 fromb43.4 in March 2017, the report added.
To strengthen the system, the Central bank is planning to shift to the Expected Credit Loss (ECL) framework from April 1, 2027, with the proposal to implement new Basel III norms, such as credit risk, counterparty risk, and capital market exposure. It aims to alert to early stress signs and allows stronger balance sheets for banks.
In order to protect consumers, RBI has taken various measures against the mis-selling of financial products and loan recovery products. Moreover, it has strengthened Internal Ombudsman framework, with a special drive from January 1, 2026, to clear pending complaints.
December 30, 2025, 11:34 IST
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