Report on Trend and Progress of Banking in India 2022-23

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Date: 27th Dec, 2023 Source: Reserve Bank of India Country: India Original Source

Brief

Summary:

The Reserve Bank of India's Report on Trend and Progress of Banking in India 2022-23 highlights the performance of the banking sector, including co-operative banks and non-banking financial institutions. The report notes that the consolidated balance sheet of scheduled commercial banks increased by 12.2% in 2022-23, driven by credit to retail and services sectors. The capital adequacy ratio of SCBs remained healthy, with a CRAR of 16.8% at end-September 2023. Asset quality improved, with the gross non-performing assets ratio at 3.2% at end-September 2023. Net interest income and profitability also increased. Urban co-operative banks saw a 2.3% expansion in their balance sheet, while non-banking financial companies (NBFCs) saw a 14.8% expansion, with improved profitability and asset quality.

Today, the Reserve Bank of India released the Report on Trend and Progress of Banking in India 2022-23, a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949. This Report presents the performance of the banking sector, including co-operative banks and non-banking financial institutions, during 2022-23 and 2023-24 so far.

Highlights

The consolidated balance sheet of scheduled commercial banks (SCBs) in 2022-23 expanded by 12.2 per cent, driven by credit to retail and services sectors; deposit growth also picked up, although it trailed credit growth.

The capital to risk weighted assets ratio (CRAR) of SCBs was 16.8 per cent at end-September 2023, with all bank groups meeting the regulatory minimum requirement and the common equity tier 1 (CET1) ratio requirement.

The improvement in asset quality of banks that began in 2018-19 continued during 2022-23 and H1:2023-24, with gross non-performing assets (GNPA) ratio at 3.2 per cent at end-September 2023.

Higher net interest income and lower provisioning boosted net interest margin (NIM) and profitability in 2022-23.
The combined balance sheet of urban co-operative banks (UCBs) expanded by 2.3 per cent in 2022-23, driven by loans and advances. Their capital buffers and profitability improved through 2022-23 and Q1:2023-24.
The consolidated balance sheet of non-banking financial companies (NBFCs) expanded by 14.8 per cent in 2022-23, led by double digit credit growth. Profitability and asset quality of the sector also improved in 2022-23 and in H1:2023-24, even as the sector remained well-capitalised with CRAR higher than the regulatory requirement.

(Yogesh Dayal)
Chief General Manager

Press Release: 2023-2024/1551

Highlights content goes here...

Summary Report: Report on Trend and Progress of Banking in India 2022-23

The Reserve Bank of India (RBI) has released its Report on Trend and Progress of Banking in India 2022-23, which provides an in-depth analysis of the performance of the banking sector in the country. The report highlights the key trends and developments in the banking sector, including the performance of scheduled commercial banks (SCBs), urban co-operative banks (UCBs), and non-banking financial companies (NBFCs) during the period from 2022-23.

SCBs:

The SCBs reported a consolidated balance sheet expansion of 16.8% in 2022-23, driven by credit growth.
The sector’s capital adequacy ratio (CAR) was 16.8% at end-September 2023, meeting the regulatory minimum requirement.
The gross non-performing assets (GNPA) ratio of SCBs improved to 3.2% at end-September 2023.
Net interest income (NII) and profitability improved in 2022-23 due to higher net interest margins (NIMs) and lower provisioning.
The CRAR of SCBs was higher than the regulatory requirement, indicating a robust capital position.

UCBs:

The UCBs’ consolidated balance sheet expanded by 2.3% in 2022-23, driven by growth in loans and advances.
Their capital buffers and profitability improved during 2022-23 and Q1:2023-24.
The sector’s CAR was higher than the regulatory requirement, indicating a solid capital position.

NBFCs:

The NBFCs’ consolidated balance sheet expanded by 14.8% in 2022-23, led by double-digit credit growth.
The sector’s profitability and asset quality improved in 2022-23 and H1:2023-24.
* The CRAR of NBFCs was higher than the regulatory requirement, indicating a well-capitalized sector.

Overall, the report highlights a positive trend in the Indian banking sector, with improvement in credit growth, capital adequacy, and profitability. The sector’s robust capital position and improved asset quality are also noteworthy. However, the report also highlights the need for continued vigilance and efforts to maintain sound risk management practices in the sector.

Reserve Bank of India

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