India's Banking Sector Rises to New Heights by 2025 Through Reforms and Innovation

India's banking sector has undergone a significant transformation from 2015 to 2025, nearly tripling in deposits and credit. Key structural reforms and innovations such as digital payment systems and financial inclusions have contributed to this robust growth. Gross non-performing assets (NPAs) decreased significantly from a peak of 11.46% in 2018 to 2.31% in 2025, indicating improved asset quality and risk management. The profitability of public sector banks (PSBs) and scheduled commercial banks (SCBs) has been on the rise, attributed to increased capital buffers and strong policy measures. Key drivers include the Asset Quality Review (AQR), the Insolvency and Bankruptcy Code (IBC), and focused government initiatives. Moving forward, banks are expected to further their growth by enhancing customer service, bolstering financial inclusion, and supporting green growth initiatives, thus solidifying India's financial stability as the country aspires to become the world's third-largest economy.

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