Report on trend and progress of banking in India 2024-25
Why in news?
The RBI’s Trend and Progress of Banking in India 2024–25 report shows a resilient banking sector with strong balance sheet growth, improved asset quality, and robust profitability, though credit and deposit growth moderated compared to last year.
Key Highlights of the Report
- Resilience of Banks: Scheduled commercial banks (SCBs) recorded double-digit growth in deposits and credit, though slower than FY24.
- Balance Sheet Expansion: The sector’s balance sheets expanded strongly, reflecting confidence in the system.
- Capital Adequacy: SCBs maintained a healthy Capital to Risk Weighted Assets Ratio (CRAR) of 17.4% (March 2025) and 17.2% (September 2025).
- Asset Quality: Gross Non-Performing Assets (GNPA) fell to a multi-decadal low, signaling improved credit discipline.
- Profitability: Banks reported robust profitability, aided by lower provisioning needs and stable net interest margins.
Policy & Structural Insights
- Financial Inclusion Push: RBI emphasized safer, more inclusive finance, with digital adoption and consumer protection as priorities.
- NBFCs & Co-operatives: The report also covered non-banking financial institutions and co-operative banks, noting their steady integration into the broader financial ecosystem.
- Technology Adoption: Payments and digital banking continue to expand, strengthening systemic soundness.
Risks & Challenges
- Moderation in Growth: While deposits and credit grew, the pace slowed compared to FY24, hinting at cautious lending and deposit mobilization.
- Global Uncertainty: External shocks (oil prices, geopolitical tensions) could test resilience.
- Regulatory Vigilance: RBI highlighted supervision priorities to ensure stability amid evolving risks.
Implications
- For Policymakers: The report underscores the need to balance growth with prudential regulation.
- For Investors: Strong capital buffers and low NPAs make Indian banks attractive, though moderation in growth signals cautious optimism.
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