The Indian commercial banking sector has shown resilience in the fiscal years 2024-25 and 2025-26, with a double-digit balance sheet expansion. The gross non-performing assets (GNPA) ratio decreased to a multi-decadal low of 2.1% by the end of September this year, as per a recent RBI report. Deposits and credit of scheduled commercial banks also experienced double-digit growth, albeit slightly lower than the previous year.
Asset quality continued to strengthen, with the GNPA ratio further declining to 2.2% by the end of March 2025 and 2.1% by the end of September 2025. Profitability of scheduled commercial banks remained strong, with return on assets (RoA) at 1.4% and return on equity (RoE) at 13.5% in 2024-25.
In the first half of 2025-26, RoA and RoE stood at 1.3% and 12.5%, respectively. The capital-to-risk-weighted assets ratio of scheduled commercial banks was 17.4% by the end of March 2025 and slightly lower at 17.2% by the end of September 2025.
Urban co-operative banks saw increased growth in their consolidated balance sheet in 2024-25 compared to the previous year. Their asset quality improved for the fourth consecutive year, with strengthened capital buffers and profitability. Non-banking financial companies also witnessed double-digit credit growth and enhanced asset quality.
The RBI’s assessment highlighted the resilience of banks and NBFCs, supported by strong capital buffers, improved asset quality, and robust earnings. The central bank continues to drive secure digital payments domestically and their integration with global systems. It focuses on responsible technology adoption and expanding financial inclusion through alternative data usage.
Regulations and policies are being aligned to strengthen the resilience and competitiveness of the banking sector while promoting ease of doing business. The RBI aims to balance financial innovations with stability, reinforce cybersecurity, mitigate fraud, enhance customer protection, integrate climate risk awareness, and preserve financial stability as a primary goal.
