Should You Invest in Indian Banking Stocks in 2025? Part 1

Credit Growth and Asset Quality Credit growth is expected to moderate to 11.7–12.5% in FY25 from 16.3% in FY24. Source: Business Standard NPAs are projected to decline to around 3.0% of gross loans by March 2025, indicating stronger asset quality. Source: MyMoneySage Net Interest Margins (NIMs) and Profitability Banks will face margin pressure due to increased deposit costs and tighter liquidity. Source: Economic Times Fitch projects a 10 basis points decline in NIMs in FY26 due to potential RBI rate cuts. Source: Reuters