Report on Trend and Progress of Banking in India 2024-25

The Reserve Bank of India (RBI) has released its Report on Trend and Progress of Banking in India 2024-25.

About the Report on Trend and Progress of Banking in India

• It is an annual statutory report published by the Reserve Bank of India under Banking Regulation Act, 1949.
• The report provides a comprehensive review of the banking sector’s performance including commercial banks, cooperative banks, and non-banking financial institutions (NBFCs). 
• Purpose: To summarise trends and developments in the banking system over the financial year.
  • It offers insights into credit and deposit growth, asset quality, profitability, capital adequacy, risk patterns, regulatory changes, and emerging challenges. 

Key Findings of Report on Trend and Progress of Banking in India 2024-25

• Overall Sector Performance: The Indian banking sector demonstrated continued resilience in FY25, supported by double-digit expansion in its balance sheets. 
  • While still robust, the pace of growth moderated compared to the previous financial year (FY24).
• Key Growth Metrics: 
  • Deposits & Credit Growth: Both deposits and credit extended by Scheduled Commercial Banks (SCBs) grew in double digits, although at a slower rate than in FY24.
  • Balance Sheet Expansion: The consolidated balance sheet of Scheduled Commercial Banks (SCBs) expanded by over 11% during the year.
• Improvement in Asset Quality: Asset quality improved markedly, reaching its strongest position in decades.
  • The Gross Non-Performing Assets (GNPA) ratio declined to a multi-decadal low of 2.2% as of March 2025.
  • This ratio improved further to 2.1% by September 2025.
  • This decline reflects sustained stress resolution efforts and better credit underwriting standards by banks.
• Profitability of Banks: Bank profitability remained strong, indicating a healthy earnings profile.
  • Return on Assets (RoA): Stood at 1.4% for FY25.
  • Return on Equity (RoE): Reached 13.5% for FY25.
• Co-operative & NBFC Sectors: 
• • Urban co-operative banks: Grew faster, with improving asset quality and profitability.
  • NBFCs: Maintained double-digit credit growth with strong capital and better asset quality

Challenges & Risks

• Fraud dynamics changed: Although the number of fraud cases reported declined, the amount involved in frauds increased significantly, highlighting emerging operational risks. 
• Customer grievances (especially related to loans, credit cards, and digital banking) saw a marginal increase, emphasising the need for stronger consumer protection and service standards. 

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