UCBs achieve strongest credit growth in 6 years, RBI report reveals robust recovery

• Urban Co-operative Banks (UCBs) recorded their strongest credit growth in six years at 6.7% in FY25, as per RBI's 'Trend and Progress of Banking in India' report.
• The consolidated balance sheet of UCBs grew 4.4% in FY25, with deposit growth at 5.2%, and momentum continuing into H1 FY26 with increased deposits and advances.
• Profitability sharply improved, with net profits rising 14.2% in FY25, following a 52% jump in FY24, driven by lower provisioning and better asset quality.
• Asset quality significantly improved for the fourth consecutive year; Gross NPAs declined to 6.2% from 12.1% in March 2021, and Net NPAs fell to 0.7%.
• UCBs maintained strong capital buffers, with over 92% exceeding 12% capital adequacy, and met the 60% priority sector lending target, benefiting MSMEs.

Why It Matters: UCBs show robust recovery and sustainable growth, driven by strong credit expansion, improved asset quality, and profitability.