RBI Reports Improved Banking Sector Health

The Reserve Bank of India (RBI) released a report on December 29, 2025, saying that Indian banks are doing better.

The report shows that the number of bad loans, called non-performing assets (NPAs), has gone down.

At the end of September 2025, only 2.1% of all loans were bad, which is a little better than the 2.2% in March 2025.

This means banks are lending money more carefully.

Also, banks' deposits and the amount of money they lend grew a lot in 2024-25, but not as much as the year before.

Even non-bank finance companies, which also lend money, are doing better.

The report also mentions that banks made more money, but not as much as the year before.

They are also better prepared to handle risks and have strong capital buffers.

However, the report also highlights that there were 5,092 frauds amounting to ₹21,515 crore in the first half of the financial year 2025-26.

Most of these frauds were related to advances and card/internet frauds.

Private banks reported more frauds, but public sector banks had a higher share of the total fraud amount.

The number of urban co-operative banks has also decreased due to mergers and cancellations of licenses, but their deposit and credit growth have improved.

Additionally, private banks reported a decline in employees, while public sector banks and small finance banks saw an increase, with small finance banks adding nearly 16,000 employees.