SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure | SDG 17: Partnerships for the Goals
Reserve Bank of India (RBI) | Ministry of Finance | Department of Financial Services (DFS)
The RBI Report on Trend and Progress of Banking in India 2024-25 highlights the sustained resilience of the Indian financial system, which maintained robust growth despite global trade uncertainty. Scheduled Commercial Banks (SCBs) achieved double-digit expansion in both deposits (11.4%) and credit (12.5%), while the Gross Non-Performing Asset (GNPA) ratio fell to a multi-decadal low of 2.2%.
Key structural and performance milestones include:
Financial Inclusion Surge: The RBI’s Financial Inclusion Index improved to 67.0. Under the PMJDY, accounts reached 55.2 crore with total deposits of ₹2.6 lakh crore, shifting the focus from simple account opening to active usage and quality of service.
Digital Ecosystem Scaling: Digital payments now account for 97.6% of all transactions in India. The RBI-Digital Payments Index (RBI-DPI) rose to 493.2 by March 2025, driven by the volume dominance of UPI and the value leadership of RTGS.
Monetary Easing: To balance growth and inflation, the RBI implemented a cumulative 125 basis point (bps) reduction in the policy repo rate during 2025, including a final 25 bps cut in December to reach 5.25%.
Credit Dynamics: Priority Sector Lending (PSL) grew by 12.5%, with a focused increase in credit to agriculture and small farmers. While Small Finance Banks (SFBs) showed strong balance sheet growth, their profitability faced pressure from increased provisions.
Supervisory Shifts: The RBI consolidated over 9,000 instructions into 244 Master Directions to reduce compliance costs and introduced the FREE-AI framework for ethical AI adoption in finance.
What is the Financial Inclusion (FI) Index? It is a comprehensive indicator developed by the RBI to measure the extent of financial inclusion across the country by capturing data on access, usage, and quality of financial services. Ranging from 0 to 100, the index provides a single value that reflects the cumulative impact of various government and regulatory initiatives—such as PMJDY and digital payment scaling—in bringing the unbanked population into the formal financial fold.
Policy Relevance
The 2024-25 findings validate the shift from “coverage-based inclusion” to “quality-driven digital governance”. By achieving 97.6% digital payment saturation, India has effectively decoupled its economic activity from physical cash constraints, providing a model for other EMDES. However, the report highlights that maintaining asset quality in microfinance and countering cyber threats through the new .bank.in domain are now the top regulatory priorities to ensure long-term stability.
Follow the full news here: TREND AND PROGRESS OF BANKING IN INDIA 2024-25