Indian banking sector resilient, bad loans decline to multi-decade low, RBI report says

MUMBAI: Indian banks’ asset quality improved to a multi-decadal low at the end of September 2025, according to a Reserve Bank of India report released on Monday.

Banks’ gross non-performing assets ratio, or the proportion of bad assets to total loans, dropped to 2.1% at end of September 2025 from 2.2% in March 2025, the central bank said in its Trend and Progress of Banking report.

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Banks’ deposits and credit grew in double digit percentages during 2024-25, but moderated from the previous year, the report said.

The asset quality of non-bank finance companies also improved in 2024-25 amid double-digit loan growth, the central bank said.