RBI releases report on trends and progress of banking in India 2024–25
The Reserve Bank of India (RBI) has released its annual “Trend and Progress of Banking in India 2024–25” report, highlighting the continued resilience and improving asset quality of the Indian banking system, even as emerging risks persist in a rapidly evolving financial environment.
According to the report, scheduled commercial banks have strengthened their balance sheets during the year, supported by lower levels of non-performing assets, improved capital adequacy, and sustained profitability. Gross and net NPAs declined further, reflecting better credit discipline, recovery efforts, and proactive risk management by banks. Capital buffers across banks remained well above regulatory requirements, providing comfort against potential shocks.
The RBI noted that credit growth remained healthy, driven by retail lending, infrastructure financing, and select industrial segments. At the same time, deposit growth kept pace, supported by improved customer confidence and stable liquidity conditions. The report observed that banks have increasingly diversified funding sources while maintaining adequate liquidity coverage ratios.
However, the central bank cautioned against emerging challenges. Rising interconnectedness with non-bank financial institutions, increased exposure to unsecured retail credit, climate-related risks, and cyber threats require closer monitoring. The RBI emphasised the need for banks to strengthen governance frameworks, stress testing mechanisms, and technology-driven risk controls.
The report also highlighted progress in digital banking, noting wider adoption of digital payment systems and technology-enabled service delivery. At the same time, the RBI reiterated the importance of safeguarding customer interests through robust grievance redressal systems and data security measures.
Overall, the RBI stated that the Indian banking sector remains stable and well-capitalised, but called for continued vigilance, prudent risk management, and alignment with evolving regulatory and macroeconomic conditions to sustain long-term financial stability.
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