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The Reserve Bank of India (RBI) has released the Report on Trend and Progress of Banking in India 2021-22, a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949. The report provides an overview of the performance of the banking sector, including co-operative banks and non-banking financial institutions, during 2021-22 and 2022-23 so far.
Scheduled Commercial Banks (SCBs): The consolidated balance sheet of SCBs registered double-digit growth in 2021-22, after a gap of seven years. Credit growth accelerated to a ten-year high in the first half of 2022-23.
Capital Adequacy: The Capital to Risk Weighted Assets Ratio (CRAR) of SCBs strengthened from 16.3% at end-March 2021 to 16.8% at end-March 2022. All banks complied with the regulatory minimum capital requirement of 11.5% and the Common Equity Tier-1 (CET-1) ratio requirement of 8%.
Asset Quality: The Gross Non-Performing Assets (GNPA) ratio of SCBs declined sequentially from its peak in 2017-18 to 5.8% at end-March 2022, due to lower slippages and reduction in outstanding GNPAs.
Profitability: Acceleration in income coupled with contraction in expenditure improved SCBs’ profitability, measured in terms of return on equity (ROE) and return on assets (ROA).
Urban Co-operative Banks (UCBs): UCBs exhibited improved financial performance, including stronger capital buffers, declining GNPA ratios, and better profitability indicators.
Non-Banking Financial Companies (NBFCs): The NBFC sector maintained comfortable liquidity buffers, adequate provisioning, a strong capital position, and improved asset quality during 2021-22.
The report highlights the overall resilience and growth of India’s banking sector, reflecting the strengthening of capital, asset quality, and profitability across various banking segments.
[RBI]