Indian banks show significant financial improvement with profitability up and NPAs at a 13-year low.

Indian banks have seen a significant improvement in financial health, with profitability rising for the sixth straight year and non-performing assets (NPAs) dropping to a 13-year low of 2.5% by September 2024. The growth is attributed to robust credit expansion, improved asset quality, and enhanced capital buffers. The gross NPA ratio fell to 2.7% by March 2024 and further to 2.5% by September 2024, while return on assets and equity reached 1.4% and 14.6% respectively in the first half of 2024-25. Non-banking financial companies also showed strong credit growth and improved asset quality.