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.
MUMBAI (Ambedkar Chamber): India’s commercial banking sector (CBS) remained resilient in 2024-25, with banks reporting strong profits, improved asset quality and adequate capital buffers even as deposit and credit growth moderated from the previous year, the Reserve Bank of India (RBI) said on Monday.
Releasing the “Report on Trend and Progress of Banking in India 2024-25” under Section 36(2) of the Banking Regulation Act, 1949, the RBI said scheduled commercial banks (SCBs) continued to clock double-digit balance sheet expansion during 2024-25, though at a slower pace than in 2023-24.
As per the report’s banking sector snapshot (SCBs excluding regional rural banks), total liabilities/assets rose 11.2 per cent to ₹3,12,18,250 crore (₹312.18 lakh crore) at end-March 2025, from ₹2,80,80,520 crore a year earlier.
Deposits grew 11.1 per cent to ₹2,41,47,183 crore (₹241.47 lakh crore), while loans and advances increased 11.5 per cent to ₹1,91,19,608 crore (₹191.20 lakh crore) at end-March 2025, the data showed.
For ordinary depositors and borrowers, the key takeaway is that banks expanded their business at a steady pace—mobilising more savings and lending more—without a deterioration in financial health.
Banking Sector Growth Snapshot (SCBs, Excluding RRBs)
| Indicator | End-March 2024 | End-March 2025 | YoY Growth (%) |
|---|---|---|---|
| Total Assets / Liabilities | ₹2,80,80,520 crore | ₹3,12,18,250 crore | 11.2% |
| Total Deposits | ₹2,17,28,000* crore | ₹2,41,47,183 crore | 11.1% |
| Loans & Advances | ₹1,71,50,000* crore | ₹1,91,19,608 crore | 11.5% |
Bad loans drop further
A major positive highlighted in the report is asset quality. Gross non-performing assets (GNPAs)—loans where repayment has stopped for a prolonged period—fell in value to ₹4,31,634 crore (₹4.32 lakh crore) at end-March 2025 from ₹4,80,818 crore a year ago.
The GNPA ratio (bad loans as a share of total advances) improved to 2.2 per cent at end-March 2025 from 2.7 per cent at end-March 2024, while the net NPA ratio declined to 0.5 per cent from 0.6 per cent, indicating better recovery and provisioning.
The RBI’s press release summary also said the GNPA ratio eased further to 2.1 per cent at end-September 2025, suggesting that the improvement continued into 2025-26 so far.
Asset Quality Improvement Snapshot (SCBs, Excluding RRBs)
| Indicator | End-March 2024 | End-March 2025 | Change / Improvement |
|---|---|---|---|
| Gross NPAs (Value) | ₹4,80,818 crore | ₹4,31,634 crore | ↓ ₹49,184 crore |
| GNPA Ratio | 2.7% | 2.2% | ↓ 0.5 percentage points |
| Net NPA Ratio | 0.6% | 0.5% | ↓ 0.1 percentage points |
| GNPA Ratio (End-Sep 2025) | — | 2.1% | Further improvement |
Profits stay strong
On profitability, SCBs reported a net profit of ₹4,01,180 crore (₹4.01 lakh crore) in 2024-25 compared to ₹3,49,603 crore in 2023-24, the report’s data showed.
The return on assets (RoA) stood at 1.4 per cent in 2024-25 (up from 1.3 per cent), while return on equity (RoE) was 13.5 per cent.
However, the net interest margin (NIM)—a key measure of how much banks earn from lending versus what they pay on deposits—moderated to 3.1 per cent from 3.3 per cent.
As per the RBI’s summary, in the first half of 2025-26, profitability remained healthy with RoA at 1.3 per cent and RoE at 12.5 per cent.
Profits Stay Strong: Profitability Snapshot (SCBs, Excluding RRBs)
| Profitability Indicator | FY 2023-24 | FY 2024-25 | Trend |
|---|---|---|---|
| Net Profit | ₹3,49,603 crore | ₹4,01,180 crore | ↑ ₹51,577 crore |
| Return on Assets (RoA) | 1.3% | 1.4% | Improved |
| Return on Equity (RoE) | — | 13.5% | Strong |
| Net Interest Margin (NIM) | 3.3% | 3.1% | Moderated |
| RoA (H1 FY26) | — | 1.3% | Healthy |
| RoE (H1 FY26) | — | 12.5% | Healthy |
Strong capital cushion
The RBI said capital buffers stayed comfortable. The capital to risk-weighted assets ratio (CRAR) was 17.4 per cent at end-March 2025, up from 16.9 per cent a year earlier.
Tier-I capital—the highest quality capital—also strengthened, with Tier-I CRAR at 15.5 per cent and Tier-I capital forming 89.1 per cent of total capital at end-March 2025.
In simple terms, this capital cushion helps banks absorb shocks and protects depositors by improving the system’s ability to handle losses.
Where credit is going
On lending, gross bank credit rose 11 per cent to ₹1,82,43,972 crore (₹182.44 lakh crore) at end-March 2025 from ₹1,64,32,164 crore a year earlier, with growth moderating sharply from 20.2 per cent in 2023-24.
Among key segments at end-March 2025:
- Personal loans stood at ₹59,71,696 crore (₹59.72 lakh crore) (up 11.7 per cent)
- Services credit was ₹50,93,565 crore (₹50.94 lakh crore) (up 12.0 per cent)
- Industry credit was ₹39,85,660 crore (₹39.86 lakh crore) (up 8.2 per cent)
- Agriculture credit was ₹22,87,060 crore (₹22.87 lakh crore) (up 10.4 per cent)
Sector-wise Credit Growth at End-March 2025 (SCBs)
| Credit Segment | Outstanding Amount | YoY Growth (%) | Trend |
|---|---|---|---|
| Personal Loans | ₹59,71,696 crore (₹59.72 lakh crore) | 11.7% | Strong retail demand |
| Services Sector Credit | ₹50,93,565 crore (₹50.94 lakh crore) | 12.0% | Fastest-growing segment |
| Industry Credit | ₹39,85,660 crore (₹39.86 lakh crore) | 8.2% | Moderate / cautious growth |
| Agriculture Credit | ₹22,87,060 crore (₹22.87 lakh crore) | 10.4% | Stable rural expansion |
For households, the personal loans number broadly reflects the continued strong demand for retail borrowing—such as housing, vehicles and other consumer credit—though growth was slower than last year.
Digital adoption rises, ATMs edge down
The report also pointed to the growing use of cards. The number of credit cards increased to 1,099 lakh (about 10.99 crore) in 2024-25, while debit cards rose to 9,908 lakh (about 99.08 crore).
At the same time, the number of ATMs and cash recycling machines marginally declined to 2.56 lakh from 2.58 lakh, indicating a gradual shift towards digital channels for routine transactions.
Digital Usage Snapshot: Cards & ATM Network (FY25)
| Indicator | FY 2024-25 Level | Trend / Interpretation |
|---|---|---|
| Credit Cards (Number) | 1,099 lakh (≈10.99 crore) | Rising usage of credit & consumer spending |
| Debit Cards (Number) | 9,908 lakh (≈99.08 crore) | Strong base; continued retail adoption |
| ATMs + Cash Recycling Machines (CRMs) | 2.56 lakh | Slight decline, indicating digital shift |
| ATMs + CRMs (Earlier) | 2.58 lakh | Network expansion slowing down |
Customer complaints: disposal rate dips
On customer service, banks received 2,96,321 complaints during 2024-25, broadly flat compared to the previous year. Banks handled 3,12,204 complaints during the year (including carried-forward cases), but the share of complaints addressed/disposed dipped to 93.1 per cent from 95.1 per cent.
Branch expansion slows
The report’s data also showed 4,991 new bank branches were opened during 2024-25, lower than 5,379 in 2023-24.
The credit-deposit ratio—a quick indicator of how much of deposits are being lent out—stood at 79.2 per cent, up slightly from 78.8 per cent.
Co-operative banks and NBFCs also improve
Beyond commercial banks, the RBI’s summary said urban co-operative banks recorded higher balance sheet growth than the previous year and saw asset quality improve for the fourth consecutive year, alongside stronger capital and profitability. It also noted that non-banking financial companies (NBFCs) continued to post double-digit credit growth with robust capital buffers and improving asset quality.
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