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

Why in News?

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

• About – This report is a comprehensive review of the Indian banking sector’s performance, regulatory developments, and financial stability.

Key findings of the report

• Bank Frauds – The amount involved in bank frauds was rising, though the number of cases was on a decline.
  • Total number of frauds decreased to 23,879 cases (2024-25) as compared with 36,052 cases (2023-24).
  • However, the amount involved in frauds increased to Rs 34,771 crore from Rs 11,261 crore in 2023-24.
• The rise in amount is due to re-examination of 122 cases worth Rs 18,336 crore (SC’s judgment, Mar 27, 2023).

In the SBI v. Rajesh Agarwal case, the SC ruled that banks must provide borrowers a chance to be heard before classifying their accounts as "fraudulent," upholding natural justice principles.

• Fraud Type -
  • Card/Internet frauds - 66.8% of cases (highest by number)
  • Advances-related frauds - 33.1% of the amount (highest by value)
• Bank’s Contribution –
  • Private Sector Banks (PVBs) - 59.3% of cases, the largest share by number is card/internet frauds & largest share by value is advances-related frauds.
  • Public Sector Banks (PSBs) - 70.7% of the total amount involved, the highest share is advances-related frauds (both number & value)
• Trend across Banks –
  • The share of card/internet frauds declined across all bank groups (both number & amount)
  • Advances-related frauds (both number & amount) increased across all bank groups (except PSBs in terms of amount).
• Resilience & Growth – Deposits and credit of scheduled commercial banks (SCBs) grew in double digits, but moderated compared to last year. (Resilient 11-11-11).
  • The SCB’s consolidated balance sheet grew 11.2% (vs. 15.5% in 2023–24).
  • On the assets side, bank credit & investments increased by 11.5% and 9.2%, respectively, in 2024-25.
  • On the liabilities side, deposits increased by 11.1% in 2024-25.
• Profitability – The net profits of SCBs increased, but slower pace, partly reflecting the impact of moderation in the growth of net interest income.
• Capital Adequacy – The capital-to-risk-weighted assets ratio of SCBs was 17.4% at end-March 2025 & 17.2% at end-September 2025.
• Leverage ratio remained well above regulatory requirements.
• Asset Quality – it is strengthened further, with gross non-performing assets (GNPA) ratio declining to a multi-decadal low of 2.2% at end-March 2025 and 2.1% at end-September 2025.
• Urban Co-operative Banks – Higher balance sheet growth than the previous year, their asset quality improved for the 4^th consecutive year, alongside strengthening of their capital buffers and profitability.
• NBFCs – The NBFCs continued to record double-digit credit growth along with robust capital buffers; their asset quality also improved during the year.

Reference

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