Department of Financial Services (DFS) Secretary M. Nagaraju on Tuesday, 26 May declared that the Indian banking sector remains strong, stable, and on course for sustained growth, even as geopolitical tensions — including the ongoing Iran-US conflict — stoke global economic anxiety. Nagaraju made the remarks in Agartala on the sidelines of a Credit Outreach Programme organised by the State Level Bankers Committee at Rabindra Satabarshiki Bhawan.

Banking Performance: Growth and NPA Turnaround

Nagaraju highlighted that both public and private sector banks recorded credit growth of approximately 15.9 per cent last year — among the highest in the history of the Indian banking industry. He added that the sector expects similarly strong growth in the current financial year.

On the critical question of stressed assets, he said gross non-performing assets (NPAs) have now fallen to nearly 0.4 per cent, marking a sharp turnaround from the elevated NPA levels that plagued the sector in previous years. 'All public and private sector banks have good capital strength. Our NPAs are much lower compared to the past and have declined further this year,' he said.

Cyber Risks Acknowledged, Banks Said to Be Prepared

Nagaraju acknowledged that cyber and software-related threats remain a persistent challenge for the sector. However, he expressed confidence in the preparedness of Indian banks. 'Cyber and software-related risks are always there, but banks remain prepared and are generally one step ahead of such threats,' he said, adding that there was no cause for worry about the overall resilience of the banking system.

He attributed the sector's improved health to a series of regulatory reforms, fresh policy interventions, and stricter banking guidelines introduced over the past several years.

₹2.25 Lakh Crore Trade Guarantee for SMEs

A key announcement at the event was a trade guarantee programme worth approximately ₹2.25 lakh crore, introduced under Prime Minister Narendra Modi's leadership, aimed at supporting small and medium enterprises (SMEs) facing economic disruptions from what Nagaraju described as 'catastrophe issues.' He said the programme would benefit SMEs across the country, including in Tripura.

Credit Outreach: 8,000 Beneficiaries, ₹600 Crore in Loans

The Credit Outreach Programme in Agartala and Udaipur in Tripura's Gomati district collectively covered nearly 8,000 beneficiaries, with loans amounting to over ₹600 crore distributed across various sections of society. The event was attended by Tripura Chief Secretary J.K. Sinha, senior bank officials, and other dignitaries. Several banking branches and services were inaugurated virtually, and corporate social responsibility (CSR) funds were also disbursed.

Financial Inclusion Milestone

Nagaraju noted that welfare schemes launched under the Modi government would complete 12 years on 8 June this year, and had significantly expanded social security coverage among economically weaker sections. 'During these years, the government has been able to extend social security coverage to a very large number of people, most of them poor and residing in villages and semi-urban areas,' he said. Going forward, the Centre is expected to deepen outreach programmes in underserved districts, with Tripura among the focus states.