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Home/Business/Banking/Indian Banks’ NPAs Fall to 2%; RBI Sees …

Indian Banks’ NPAs Fall to 2%; RBI Sees No Middle East Risk

Banking
By ThePip Desk•
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An interior shot of an Indian bank, with employees working and a monitor displaying financial graphs in the background.

Indian bank interior with RBI emblem, showing staff and a financial monitor in the background.

Key Highlights

RBI reports Indian banks’ NPAs drop to 2% by Dec 2025. Credit growth accelerates. RBI sees no systemic risk from Middle East conflict. Read more.

India’s banking sector has seen significant improvement in asset quality, with non-performing assets (NPAs) declining to 2% by December 2025, according to the Reserve Bank of India (RBI). This improvement is spread across multiple sectors, including retail, services, industry, and agriculture.

The RBI also noted a strong acceleration in bank credit growth, which reached 13.8 percent year-on-year by March 2026. This indicates a robust demand for credit and healthy economic activity.

Despite ongoing global supply chain disruptions and geopolitical tensions, including the conflict in the Middle East, the Reserve Bank of India has stated that it does not foresee any systemic risks to the Indian financial system. The central bank continues to monitor the situation and is prepared to take necessary measures to ensure financial stability.

IndiaIndian banksRBI