Indian Banking Sector Achieves 20-Year Non-Performing Assets Low, Strongest Profit Surge

Key facts

• Gross Non-Performing Assets (NPAs) dropped to 2.31% by March 2025.
• Gross NPAs peaked at 11.46% in 2018.
• Net NPAs declined to 0.52%.
• Public Sector Banks (PSBs) reduced Gross NPAs from 9.11% in 2021 to 2.58% in 2025.
• Domestic deposits increased from ₹88.35 lakh crore in 2015 to ₹231.90 lakh crore in 2025.
• Credit grew from ₹66.91 lakh crore to ₹181.34 lakh crore between 2015 and 2025.
• Capital to Risk-Weighted Assets Ratio (CRAR) improved from 12.94% in 2015 to 17.36% in 2025.
• Common Equity Tier 1 (CET-1) ratio reached 14.81%.
• Public Sector Bank (PSB) profits rose from ₹1.05 lakh crore in FY 2022–23 to ₹1.78 lakh crore in FY 2024–25.
• Scheduled Commercial Banks (SCBs) posted their highest ever earnings of ₹4.01 lakh crore in FY 2024–25.
• Scheduled Commercial Banks (SCBs) earned ₹1.02 lakh crore in the first quarter of FY26.
• Return on Assets (RoA) stood at 1.37%.
• Return on Equity (RoE) stood at 14.1%.
• Key reforms include the Asset Quality Review (2015) and the Insolvency and Bankruptcy Code (2016).
• The Reserve Bank of India (RBI) proposed the Expected Credit Loss (ECL) framework in 2025.