(MENAFN- KNN India) New Delhi, Dec 27 (KNN) The Reserve Bank of India's latest banking sector report reveals a significant milestone in the Indian banking industry, with bank profitability showing improvement for the sixth consecutive year and gross non-performing assets (GNPAs) reaching a 13-year low of 2.7 percent in 2023-24, showcasing the sector's robust health amid strong macroeconomic conditions.

According to the Report on Trend and Progress of Banking in India 2023-24, released on December 27, the sector's profitability metrics have remained strong through the first half of 2024-25, with return on assets (RoA) standing at 1.4 percent and return on equity (RoE) at 14.6 percent. The asset quality continued to improve, with the GNPA ratio further declining to 2.5 percent by September 2024.

The scheduled commercial banks recorded impressive financial performance, with net profits surging by 32.8 percent to Rs 3,49,603 crore during the last fiscal year.

The consolidated balance sheet of scheduled commercial banks, excluding Regional Rural Banks (RRBs), expanded by 15.5 percent in 2023-24, surpassing the previous year's growth of 12.2 percent.

As of March 2024, India's commercial banking landscape comprised 141 banks, including 12 public sector banks, 21 private sector banks, 45 foreign banks, 12 small finance banks, six payment banks, 43 RRBs, and two local area banks. Of these, 137 were classified as scheduled banks, while four remained non-scheduled.

The non-banking financial companies (NBFC) sector demonstrated resilience with double-digit credit growth, despite a contraction in unsecured lending.

The sector's asset quality showed improvement, with the GNPA ratio decreasing to 3.4 percent by September 2024. Capital adequacy remained strong, with the Capital to Risk-Weighted Assets Ratio (CRAR) maintaining levels well above regulatory requirements.

The banking sector's overall performance, marked by satisfactory capital positions, strong leverage ratios, and improved asset quality, reflects the effectiveness of regulatory measures and the sector's adaptation to evolving market conditions, positioning it favorably for sustained growth in the coming years.

(KNN Bureau)

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