India’s banking sector has shown remarkable progress with holistic growth and adoption of technology in sync with changing times, a Reserve Bank of India (RBI) report analyzing key banking trends has found. 

The ‘Report on Trend And Progress of Banking in India 2023-24’ released by the RBI in December 2024 finds the asset quality of banks to have significantly improved along with efforts towards financial inclusion strengthening; digital payment growth acceleration and progress in delivery of micro-credit.

Banks’ profitability rose for the sixth consecutive year and asset quality improved further with the gross non-performing assets (GNPA) ratio falling to its lowest in 13 years at 2.7 per cent at end-March 2024. During 2023- 24, around 44.4 per cent of the reduction in GNPAs was attributable to better recoveries and upgradations, the report stated.

The net NPA (NNPA) ratio also declined to a decadal low of 0.62 per cent at end-March 2024, driven by stronger provision buffers. At end-September 2024, the NNPA ratio improved further to 0.57 per cent, the report added. 

Further, it was also found that during 2023-24, the amount involved in frauds was the lowest in a decade, while the average value was the lowest in 16 years.

The Digital Payments Index was introduced by RBI in 2021 to measure the progress of digitalisation and assess the deepening and penetration of digital payments. It was found that the index stood at 445.5 compared to 395.6 a year ago, driven by significant growth in payment performance and payment infrastructure across the country, the report declared. 

Similarly, the Financial Inclusion Index (FII), monitors the progress of financial inclusion in the country. The index rose to 64.2 in March 2024 from 60.1 in March 2023, reflecting deepening of financial inclusion. At the same time, it was noted that during 2023-24, there had been steady progress in the delivery of micro-credit through Self-Help Groups (SHGs) and Joint Liability Groups (JLGs). The number of SHGs accessing credit from banks rose from 43.0 lakh in 2022-23 to 54.8 lakh in 2023-24. Credit disbursed to JLGs grew by 41.2 per cent during 2023-24 as compared with 18.3 per cent in the previous year.

The report also made a special mention of the Pradhan Mantri Jan Dhan Yojana (PMJDY) which completed 10 years in August 2024. The number of beneficiaries under PMJDY reached 54.2 crore, with deposits of ₹2.4 lakh crore as on December 11, 2024. With 66.6 per cent of beneficiaries in rural/semi-urban areas and the average balance in PMJDY accounts expanding four times since launch, the report notes, it is reflective of growing usage and successful integration of previously unbanked individuals into the formal financial system.

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