Indian banks' profitability is expected to moderate in 2025-26 due to higher delinquencies in unsecured loans and rising credit costs, according to India Ratings. Rapid financial improvement seen between 2021-2024 is likely to peak in 2024-25. Increased delinquencies in personal loans, credit cards, and microfinance will impact banks' profits, with credit growth forecast cut to 13.5% for 2024-25.
