RBI flags further improvement in asset quality across Indian lenders

Anabelle Colaco
31 Dec 2025, 13:54 GMT+10

Indian banks’ asset quality improved to a multi-decadal low at the end of September 2025, according to a report released on December 29 by the Reserve Bank of India
Banks’ gross non-performing assets ratio — the proportion of bad loans to total advances — declined to 2.1 percent at the end of September 2025, down from 2.2 percent in March 2025
The RBI said banks’ deposits and credit grew in double-digit percentages during the 2024–2025 financial year, though growth moderated from the previous year

MUMBAI, India: Indian banks' asset quality improved to a multi-decadal low at the end of September 2025, according to a report released on December 29 by the Reserve Bank of India.

Banks' gross non-performing assets ratio — the proportion of bad loans to total advances — declined to 2.1 percent at the end of September 2025, down from 2.2 percent in March 2025, the central bank said in its Trend and Progress of Banking report.

The RBI said banks' deposits and credit grew in double-digit percentages during the 2024–2025 financial year, though growth moderated from the previous year.

The asset quality of non-bank finance companies also improved in 2024–2025, the report added, even as those firms recorded double-digit loan growth.

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