The health of Indian banks continued to enhance in 2021-22 with their balance sheet growing at double digits after a space of seven years and their property quality and capital position bettering, the Reserve Bank of India (RBI) stated in its yearly report on pattern and development of banking in India. At the same time, the banking regulator flagged the problem of slippages from reorganized accounts.

Going forward, it is crucial that banks make sure due diligence and robust credit appraisal to restrict credit threat, the report stated. Foreign banks contingent liabilities are more than 10 times their balance sheet size and make up about half of the banking systems overall off-balance sheet direct exposures.

Their non-interest earnings, however, has not increased commensurately, the report said. The report also kept in mind that, after decreasing for two successive years, brand-new bank branches opened by commercial banks increased by 4.6 percent throughout 2021-22.

The growth was led by brand-new branches opened in Tier 4, Tier 5 and Tier 6 centres. Although the share of Tier 2 and Tier 3 centres in new branches decreased in 2021- 22 from a year earlier, over half of the new branches opened throughout the year were in Tier 1 and Tier 3 centres, the report stated.