RBI Releases Report on Trend and Progress of Banking in India 2024–25: Sector Remains Resilient, Fraud Amounts Rise

The Reserve Bank of India (RBI) on Monday released its annual Report on Trend and Progress of Banking in India 2024–25, highlighting the continued resilience of the Indian banking sector, supported by strong balance sheet growth, improving asset quality, robust profitability, and healthy capital buffers.

At the same time, the report flagged a sharp rise in the value of bank frauds, even as the number of fraud cases declined during the year, underlining emerging risks amid rapid digitalisation.

Banking Sector Performance: Growth Moderates but Remains Strong

According to the RBI, the Indian banking system remained resilient in FY25, supported by double-digit expansion in balance sheets, although the pace of growth moderated compared to the previous financial year.

• The consolidated balance sheet of Scheduled Commercial Banks (SCBs) (excluding Regional Rural Banks) grew by 11.2% in 2024–25, compared to 15.5% in 2023–24.

• Bank credit increased by 11.5%, while investments grew by 9.2% during FY25.

• On the liabilities side, deposits rose by 11.1% in 2024–25.

Both credit and deposits of SCBs expanded in double digits, though at a slower pace than in FY24, reflecting a gradual normalisation of growth.

Asset Quality Hits Multi-Decadal Low

The RBI report noted a continued improvement in asset quality across the banking system.

• The Gross Non-Performing Assets (GNPA) ratio declined to a multi-decadal low of 2.2% at end-March 2025.

• It further improved to 2.1% by end-September 2025, reflecting sustained stress resolution, improved recovery mechanisms, and better credit underwriting standards.

Urban Co-operative Banks also recorded improved asset quality for the fourth consecutive year, alongside stronger capital buffers and profitability.

Profitability Remains Robust

Bank profitability remained strong during FY25, despite some moderation in income growth.

• Return on Assets (RoA): 1.4%

• Return on Equity (RoE): 13.5%

Net profits of SCBs increased during the year, though at a slower pace compared to FY24, partly due to moderation in net interest income growth, the RBI said.

Capital Adequacy Well Above Regulatory Norms

Banks maintained a strong capital position throughout the year:

• Capital to Risk-Weighted Assets Ratio (CRAR):

  • 17.4% at end-March 2025

  • 17.2% at end-September 2025

Both CRAR and leverage ratios remained well above regulatory requirements, providing resilience against potential shocks.

Bank Frauds: Fewer Cases, Higher Amounts

Despite safeguards and technological interventions, fraudsters continued to exploit vulnerabilities in the banking system.

• The number of fraud cases declined to 23,879 in 2024–25, from 36,052 cases in 2023–24.

• However, the amount involved in frauds surged to ₹34,771 crore, compared to ₹11,261 crore in the previous year.

The RBI clarified that the spike in fraud value was mainly due to re-examination and fresh reporting of 122 fraud cases amounting to ₹18,336 crore, following compliance with the Supreme Court judgment dated March 27, 2023.

April–September 2025 Trends

In the first half of 2025–26 (April–September):

• Fraud cases declined sharply to 5,092, from 18,386 in the same period of 2024–25.

• However, the amount involved increased to ₹21,515 crore, up from ₹16,569 crore.

Nature and Distribution of Frauds

Based on the date of occurrence during 2024–25:

• Card and internet frauds accounted for 66.8% of total fraud cases by number.

• Advances-related frauds constituted 33.1% of the total amount involved.

Bank-wise distribution:

• Private Sector Banks (PVBs):

  • 59.3% of total fraud cases by number

  • Card/internet frauds dominated by volume

  • Advances-related frauds dominated by value

• Public Sector Banks (PSBs):

  • 70.7% of the total fraud amount

  • Highest share of advances-related frauds by both number and value

The RBI noted that the share of advances-related frauds increased across all bank groups (except PSBs by value), largely due to reclassified cases.

Non-Banking Financial Companies (NBFCs)

NBFCs continued to register double-digit credit growth during FY25, supported by robust capital buffers. Their asset quality also improved, reinforcing stability across the broader financial system.

Outlook: Competition, Technology and Risk Management

Looking ahead, the RBI cautioned that banks will face intensifying competition from non-bank financial intermediaries in meeting the resource needs of the commercial sector.

The central bank also highlighted that:

• Rapid digitalisation and technological change could reshape how customers save and borrow

• New risks, including cyber risk, may emerge

• Strengthening risk assessment, improving operational efficiency, and adopting responsible technology are critical

The RBI emphasised the importance of:

• Financial inclusion

• Consumer education and protection

• Strong corporate governance and risk management practices

These, it said, remain essential for the long-term sustainability and stability of the banking system.

The RBI’s Report on Trend and Progress of Banking in India 2024–25 paints a picture of a resilient and well-capitalised banking sector, marked by improving asset quality and strong profitability. However, rising fraud values and growing technological risks underline the need for vigilance, governance, and continuous strengthening of safeguards as the financial system evolves.