The Indian commercial banking sector remained resilient during 2024-25 and 2025-26 so far, supported by double-digit balance sheet expansion while asset quality strengthened further, with the gross non-performing assets (GNPA) ratio declining to a multi-decadal low of 2.1 per cent at end-September this year, according to an RBI report released on Monday.
Deposits and credit of scheduled commercial banks also grew in double digits, albeit with a moderation from the previous year, the RBI report on the “Trend and Progress of Banking in India”, stated.
Asset quality strengthened further, 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.
Profitability of the 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. During H1: 2025-26, RoA and RoE of the SCBs stood at 1.3 per cent and 12.5 per cent, respectively.
The capital-to-risk-weighted assets ratio of scheduled commercial banks (SCBs) was 17.4 per cent at end-March 2025 and 17.2 per cent at end-September 2025.
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 the strengthening of their capital buffers and profitability.
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.
The RBI’s “assessment” stated that banks and NBFCs remain resilient, backed by strong capital buffers, improved asset quality, and robust earnings, ensuring credit flow to productive sectors and the underserved population.
The Reserve Bank continues to drive secure and interoperable digital payments domestically and their integration with global payments systems. It is also enabling responsible adoption of technology and the use of alternative data to expand financial inclusion. Its regulatory and supervisory policies remain focused on reinforcing cybersecurity, mitigating fraud, enhancing customer protection, integrating climate risk awareness, and preserving financial stability as an overarching goal. Balancing financial innovations with stability, strengthening public trust, and supporting sustainable development will continue to guide the Reserve Bank’s policies going forward, the report said.
Regulations and macroprudential policies are being aligned to further strengthen the resilience and competitiveness of the banking sector, while promoting ease of doing business. Going forward, balancing innovation with stability, supported by prudent regulation and supervision, will be crucial for ensuring a resilient financial system, the report added.
