FINANCE CURRENT

AFFAIRS | RBI 247

Report on Trend and

Progress of Banking in
India
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Report on Trend and Progress of

Banking in India 2022-23
Ø This report is a statutory publication in compliance with Section 36
(2) of the Banking Regulation Act, 1949, and presents the
performance of banking sectors (including cooperative banks and
Non-banking financial companies (NBFCs).
Ø As per RBI’s report the health of Indian banks continued to
improve in 2022-23 with their balance sheet.
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Conclusion
Ø The Indian banking system remains sound and resilient backed by
Ø high capital ratios,
Ø improved asset quality, and
Ø robust earnings growth.

This was due to double-digit credit growth and domestic economic activity

How to sustain it in the future?

To Sustain this, further
Ø strengthening of governance,
Ø risk management practices , and
Ø additional buffers are required
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Scheduled Commercial Banks (SCBs):

Ø The combined balance sheet of scheduled commercial banks (SCBs) expanded in
double digits, driven by credit to retail and services sectors, with higher net
interest income and lower provisioning requirements boosting profitability.
Ø The consolidated balance sheet of SCBs (excluding RRBs) grew by 12.2% in
2022-23, the highest in 9 years.
Ø During 2022-23, SCBs strengthened their capital buffers, improved asset quality
and maintained sufficient liquid assets.
Ø The GNPA ratio of SCBs fell to a decadal low of 3.9% at end-March 2023 and
further to 3.2% at end-September 2023. During 2022-23, around 45% of reduction
in GNPAs of SCBs was contributed by recoveries and upgradations.
Ø At end-March 2023, there was no bank under the prompt corrective action (PCA)
framework as compared to 1 at end-March 2022
Ø Banks have significantly held high-quality liquid assets (HQLAs) than the
stipulated requirement of 100%
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Scheduled Commercial Banks (SCBs):

CRAR:
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Scheduled Commercial Banks (SCBs):

CRAR:
Report on Trend and Progress of
Banking in India 2022-23
Scheduled Commercial Banks (SCBs):
NII and NIM:
Condition of NPAs:
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Non-banking financial Companies (NBFCs):

Ø In 2022-23, the combined balance sheet NBFCs saw robust growth, accompanied by
improved asset quality and enhanced capital buffers.
Ø The combined balance sheet of NBFCs expanded by 14.8%, largely due to
double-digit credit growth, on account of unsecured loans, micro-finance loans,
and MSMEs.
Ø The growth of unsecured loans (28.1%) was more than twice that of secured loans
(11.5%)
Ø The share of secured loans in total NBFCs credit fell from 72.4% at end-March
2022 to 69.5% at end-March 2023, while that of unsecured loans inched up from
27.6% to 30.5% over the same period.
Ø The asset quality of the sector showed further improvement as the GNPA and
NNPA ratios fell to 4.1% and 1.5%, respectively.
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Non-banking financial Companies (NBFCs):

CRAR:

Ø NBFCs are required to maintain a minimum capital ratio of not less than 15% of
aggregate risk-weighted asset.

Ø The NBFC sector is comfortably placed, with CRAR well above the regulatory
requirement.
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Co-operative Banks:

Ø The consolidated assets

of the co-operative banking
sector at end-March 2022
were 21.6 lakh crore,
around 10% of that of
SCBs.
Ø Rural co-operatives
comprise more than 2/3rd
of the sector
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During 2022-23, the consolidated CRAR of all UCBs improved due to

higher profit accretion and
capital raised through long-term subordinated bonds
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UCBs’ asset quality improved further in 2022-23, partly reflecting lower slippages and
stronger loan recovery
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Q) RBI released the report on Trend and Progress of Banking in India

2022-23. The report is statutory published under section ________ of
Banking Regulation Act, 1949. Select the correct answer to fill the blank:
[a] Section 35 (2) of the Banking Regulation Act, 1949.
[b] Section 36 (2) of the Banking Regulation Act, 1949.
[c] Section 37 (2) of the Banking Regulation Act, 1949.
[d] Section 38 (2) of the Banking Regulation Act, 1949.
[e] Section 39 (2) of the Banking Regulation Act, 1949.