Context: Recently, RBI released its annual report under the Banking Regulation Act, 1949, highlighting the performance of the banking sector in 2023-24.

Key Highlights 

Scheduled Commercial Banks (SCBs) 

• Credit Growth & Profitability: SCBs recorded improved profitability for the sixth consecutive year. 

• Improved Asset Quality: Gross NPAs declined to a 13-year low at 2.5% in September 2024. 

• Strong Capital Position: The Capital-to-Risk-Weighted Assets Ratio (CRAR) stood at 16.8% as of September 2024, meeting regulatory requirements. 

• RBI mandates banks to maintain a minimum CRAR of 9% against the 8% CRAR required under BASEL-III norms. 

• CRAR is a ratio that compares the value of a bank’s capital (or net worth) against the value of its various assets weighted according to risk.

• Urban Co-operative Banks (UCBs): The combined balance sheet expanded, with asset quality improving for the third straight year. 

• Non-Banking Financial Companies (NBFCs): Achieved double-digit credit growth, with GNPA falling to 3.4% by September 2024. 

• Technological Advancements: Emerging platforms like the Unified Lending Interface (ULI) and Open Credit Enablement Network (OCEN) aim to enhance credit access for small businesses and individuals. 

• Financial Inclusion: The upcoming National Strategy for Financial Inclusion (NSFI) 2025-30 will deepen financial inclusion while addressing emerging challenges. 

• Financial Frauds: Report has also raised concern about rising banking frauds. Stating fraud cases surged to Rs 21,367 crore during April-September 2024, up from Rs 2,623 crore last years, threatening reputation, operations, and financial stability.