Indian banking sector shows strong growth in 2024-25: RBI report
The report said bank profits remained high during this period. Two key measures of profitability—return on assets and return on equity—showed strong results
- Dec 29, 2025,
- Updated Dec 29, 2025 7:54 PM IST
The Indian banking sector recorded a strong and steady performance during 2024–25, according to a report released by the Reserve Bank of India (RBI). The report said banks continued to grow their balance sheets, meaning the total value of assets owned by banks increased. This growth was seen across commercial banks, co-operative banks and other financial institutions, even though the pace was slightly slower than the previous year.
The RBI report, titled Report on Trend and Progress of Banking in India 2024–25, was released on Monday and explains how banks performed during 2024–25 and the first half of 2025–26. It noted that both deposits and bank lending grew at a double-digit rate, showing that more people are saving money in banks and banks are lending more.
One of the key highlights of the report was the improvement in the quality of loans. The gross non-performing assets (NPAs), which include loans that are not being repaid on time, fell to their lowest level in many decades. Gross NPAs dropped to 2.2 per cent by March 2025 and further declined to 2.1 per cent by September 2025. This indicates that fewer loans are turning bad, making the banking system safer and more stable.
Banks also kept a large amount of extra capital as a safety measure. This safety cushion is known as the capital to risk-weighted assets ratio. For major commercial banks, this ratio stood at 17.4 per cent in March 2025 and increased to 17.2 per cent by September 2025. The additional capital helps banks remain stable even during unexpected financial stress.
The report said bank profits remained high during this period. Two key measures of profitability—return on assets and return on equity—showed strong results. In 2024–25, the return on assets was 1.4 per cent, which declined slightly to 1.3 per cent in the first half of 2025–26. These numbers indicate that banks are managing their funds efficiently and earning good profits from daily operations.
Other parts of the financial sector also performed well. Urban co-operative banks saw faster balance sheet growth compared to the previous year. They improved their loan quality for the fourth consecutive year and increased both savings and profits.
Non-banking financial companies also reported strong performance. They recorded double-digit credit growth, improved the quality of their loans, and maintained strong financial buffers to protect against future risks.
(With ANI inputs)
The Indian banking sector recorded a strong and steady performance during 2024–25, according to a report released by the Reserve Bank of India (RBI). The report said banks continued to grow their balance sheets, meaning the total value of assets owned by banks increased. This growth was seen across commercial banks, co-operative banks and other financial institutions, even though the pace was slightly slower than the previous year.
The RBI report, titled Report on Trend and Progress of Banking in India 2024–25, was released on Monday and explains how banks performed during 2024–25 and the first half of 2025–26. It noted that both deposits and bank lending grew at a double-digit rate, showing that more people are saving money in banks and banks are lending more.
One of the key highlights of the report was the improvement in the quality of loans. The gross non-performing assets (NPAs), which include loans that are not being repaid on time, fell to their lowest level in many decades. Gross NPAs dropped to 2.2 per cent by March 2025 and further declined to 2.1 per cent by September 2025. This indicates that fewer loans are turning bad, making the banking system safer and more stable.
Banks also kept a large amount of extra capital as a safety measure. This safety cushion is known as the capital to risk-weighted assets ratio. For major commercial banks, this ratio stood at 17.4 per cent in March 2025 and increased to 17.2 per cent by September 2025. The additional capital helps banks remain stable even during unexpected financial stress.
The report said bank profits remained high during this period. Two key measures of profitability—return on assets and return on equity—showed strong results. In 2024–25, the return on assets was 1.4 per cent, which declined slightly to 1.3 per cent in the first half of 2025–26. These numbers indicate that banks are managing their funds efficiently and earning good profits from daily operations.
Other parts of the financial sector also performed well. Urban co-operative banks saw faster balance sheet growth compared to the previous year. They improved their loan quality for the fourth consecutive year and increased both savings and profits.
Non-banking financial companies also reported strong performance. They recorded double-digit credit growth, improved the quality of their loans, and maintained strong financial buffers to protect against future risks.
(With ANI inputs)