Banks must balance credit growth with financial stability, warns India's financial services secretary.

Banks must balance credit growth with financial stability, warns India's financial services secretary. M. Nagaraju emphasized that lenders cannot pursue expansion at the expense of stability, citing lessons from the NPA crisis that burdened Indian banks a decade ago. The sector has recovered significantly, with non-performing assets declining from double-digit levels to approximately two to three percent, matching global standards. As India finances its next growth chapter domestically, banks must maintain rigorous underwriting, strong capital buffers, and robust governance. The secretary stressed that growth and financial stability are mutually reinforcing and must be pursued together in an environment of global uncertainty and shifting trade patterns.