Daijiworld Media Network - Mumbai
Mumbai, Dec 29: The Indian commercial banking sector demonstrated notable resilience during 2024-25 and the first half of 2025-26, underpinned by robust balance sheet expansion and improving asset quality, according to the Reserve Bank of India’s latest report on the "Trend and Progress of Banking in India."
The report highlighted that the gross non-performing assets (GNPA) ratio of scheduled commercial banks (SCBs) fell to a multi-decade low of 2.2% by March 2025 and further to 2.1% by September 2025, reflecting strengthened asset quality. Deposits and credit also recorded double-digit growth, though slightly moderated compared to the previous year.
SCBs maintained strong profitability, with return on assets (RoA) at 1.4% and return on equity (RoE) at 13.5% in 2024-25. During the first half of 2025-26, RoA and RoE stood at 1.3% and 12.5%, respectively. Capital adequacy remained robust, with the capital-to-risk-weighted assets ratio at 17.4% at end-March 2025 and 17.2% at end-September 2025.
Urban co-operative banks also recorded higher balance sheet growth in 2024-25, alongside continued improvement in asset quality, capital buffers, and profitability. Non-banking financial companies (NBFCs) sustained double-digit credit growth and displayed stronger capital positions, with asset quality improving over the year.
The RBI’s assessment emphasized that strong capital buffers, improved asset quality, and consistent earnings have kept banks and NBFCs resilient, ensuring steady credit flow to productive sectors and underserved populations.
The report also underscored the Reserve Bank’s ongoing efforts to promote secure and interoperable digital payments domestically and their integration with global payment systems. Regulatory measures focus on enabling responsible technology adoption, leveraging alternative data to expand financial inclusion, enhancing cybersecurity, mitigating fraud, protecting customers, addressing climate-related risks, and maintaining overall financial stability.
Looking ahead, the RBI highlighted the importance of balancing innovation with stability, strengthening public trust, and supporting sustainable development.
Macroprudential policies and regulations are being aligned to enhance sector resilience, competitiveness, and ease of doing business, ensuring a robust and stable financial ecosystem for India.