Banks and NBFCs remain healthy, credit to commercial sector rises, says RBI Governor
Kolkata, Dec 5, 2025
Synopsis
The Reserve Bank of India reported robust financial parameters for banks and non-banking finance companies, facilitating increased resource flow to the commercial sector. Capital adequacy and asset quality remain strong, with credit growth bolstered by greater non-bank intermediation and sustained lending to various segments.
The system-level financial parameters for banks and non-banking finance companies remain robust facilitating a higher flow of resources to the commercial sector, Reserve Bank of India said Friday.
Governor Sanjay Malhotra said that parameters related to capital adequacy, and asset quality are strong for both banks and non-banks.
"The total flow of resources to the commercial sector has strengthened, bolstered by greater non-bank intermediation," said in his monetary policy statement.
In the current financial year so far, the total flow of resources to the commercial sector was a tad over Rs 20 lakh crore against Rs 16.5 lakh crore in the corresponding period of the previous year. Outstanding credit from bank and non-bank sources increased by 13%.
The system-level capital to risk weighted assets ratio (CRAR) of banks stood at 17.24% in September, well above the regulatory minimum level of 11.5%. The gross non-performing assets ratio improved further to 2.05% at the end of September from 2.54% a year prior with collective net NPA ratio being at 0.48% against 0.57%. Liquidity buffers were robust too with liquidity coverage ratio being at 131.69%. The annualised return on assets and return on equity stood at 1.32% and 13.06% respectively.
Bank credit grew 11,3% on-year till October, supported by sustained lending to retail and service sector segments.
"Industrial credit growth firmed up, aided by buoyant credit flow to micro, small and medium enterprises (MSMEs). Large industries also recorded improvement in credit growth," Malhotra said.
For the NBFC sector, the CRAR stood at 25.11% against the minimum regulatory requirement of 15%. Their gross NPA ratio has improved to 2.21% from 2.57% while net NPA ratio improved to 0.99% from 1.04%. Return on assets for the sector however fell to 2.83% from 3.25%.
[The Economic Times]
