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Banking sector remains resilient backed by strong balance sheet, improved asset quality: RBI
Dec-30-2025

The Reserve Bank of India (RBI) in its latest report has said that the banking sector remained resilient during 2024-25, supported by a strong balance sheet, sustained profitability and improved asset quality. Further, the commercial banks maintained robust performance during the period with the gross non-performing assets (GNPA) ratio declining to a multi-decadal low of 2.2 per cent at March-end. Besides, the capital and liquidity buffers remained well above the regulatory requirements across bank groups, while bank credits and deposits continued to grow in double-digits. It pointed that the strong banking sector fundamentals provide a buffer against risks, which, together with prudent regulation, create conditions for sustained credit flow.

RBI highlighted that net profits of commercial banks increased at slower pace in 2024-25 than that of previous year. During the same period, the combined net profit of all scheduled commercial banks (SCBs) grew 14.8 per cent year-on-year to Rs 4.01 lakh crore, with the return on assets (RoA) at 1.4 per cent and return on equity (RoE) at 13.5 per cent. The profits of SCBs increased 32.8 per cent to around Rs 3.5 lakh crore in 2023-24. RBI also pointed that the capital-to-risk-weighted assets ratio of SCBs was 17.4 per cent at March-end 2025 and 17.2 per cent at the end of September 2025.

Moreover, RBI said that the consolidated balance sheet of urban co-operative banks recorded higher growth in 2024-25 than the previous year. It added that their asset quality improved for the fourth consecutive year, alongside the strengthening of their capital buffers and profitability. Further, it noted that 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.

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