New Delhi [India], December 29 : The Indian banking sector showed a strong and steady performance during the 2024-25 period, according to a recent report released by the Reserve Bank of India (RBI). The banking industry maintained its strength through a healthy expansion of its balance sheets, which measures the total value of what banks own and what they owe. This growth happened for commercial banks, co-operative banks, and other financial institutions despite a slight slowdown compared to the previous year.
The RBI document titled "Report on Trend and Progress of Banking in India 2024-25," released on Monday, explains how different types of banks performed throughout 2024-25 and the first half of the 2025-26 period. The findings show that both the money people put into banks and the money banks lent to people grew at a rate of double-digits.
A major highlight of the report is the improvement in the quality of loans. The gross non-performing assets ratio, which tracks loans that people are struggling to pay back, fell to its lowest level in many decades. This number dropped to 2.2 per cent by March 2025 and decreased even further to 2.1 per cent by September 2025. This change suggests that the banking system is becoming safer and more stable because fewer loans are going unpaid.
Banks also kept a large amount of extra money as a safety net. This safety net is called the capital to risk weighted assets ratio. For major commercial banks, this ratio was 17.4 per cent in March 2025 and stayed strong at 17.2 per cent by September 2025. Having this extra capital helps banks stay healthy even if they face unexpected financial problems in the future.
The report mentions that the profits of these banks stayed very high. Two main ways to measure profit, called return on assets and return on equity, showed solid results. In the 2024-25 year, the return on assets was 1.4 per cent. For the first half of 2025-26, this number stayed close to 1.3 per cent. These figures indicate that banks are managing their money efficiently and earning a good amount of profit from their daily operations.
Other parts of the financial world also did well. Urban co-operative banks saw their balance sheets grow faster than they did the year before. They improved their loan quality for the fourth year in a row while also increasing their savings and profits. Additionally, non-banking financial companies reported a credit growth of double digits. These companies also improved the quality of their loans and kept strong financial buffers to protect themselves.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor