As per the Reserve Bank of India’s Report on Trend and Progress of Banking in India 2024-25, State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs), which together constitute the short-term rural co-operative credit structure, reported steady balance sheet expansion, sustained growth in deposits and advances, and improving asset quality during 2024-25.
While StCBs recorded faster growth in advances supported by higher borrowings and refinance, DCCBs leveraged their wider branch network to maintain stronger deposit mobilisation and credit outreach at the district level, reinforcing their complementary roles in agricultural credit delivery.
At end-March 2025, there were 34 StCBs operating through 2,146 branches and 351 DCCBs with a network of 13,825 branches, linked to over 1.07 lakh Primary Agricultural Credit Societies (PACS) serving more than 6.5 lakh villages across the country.
During 2024-25, the balance sheet size of StCBs increased by 7.7 per cent to Rs 5.26 lakh crore from Rs 4.89 lakh crore a year ago. Deposits grew by 6.8 per cent to Rs 2.74 lakh crore, while borrowings rose by 9.5 per cent to Rs 1.90 lakh crore, increasing their share in total liabilities to 36.1 per cent from 35.5 per cent, largely due to higher borrowings from NABARD. Capital and reserves together increased to Rs 37,212 crore at end-March 2025.
On the asset side, loans and advances of StCBs expanded by 8.6 per cent to Rs 3.20 lakh crore, compared with 10.9 per cent growth in the previous year. Agricultural loans accounted for 43.4 per cent of total advances, of which 77.7 per cent were crop and short-term loans.
With credit growth exceeding deposit growth, the credit-deposit ratio of StCBs rose further to 116.7 per cent at end-March 2025 from 114.7 per cent a year earlier. Investments increased by 8.3 per cent to Rs 1.69 lakh crore, though the share of SLR investments moderated to 45.8 per cent.
Despite a decline in net profits during the year due to higher operating expenses and faster growth in interest expended than interest income, 32 out of 34 StCBs remained profitable.
Asset quality improved for the fourth consecutive year, with the gross NPA ratio declining to 4.8 per cent at end-March 2025 from 6.7 per cent in 2021. The net NPA ratio remained stable at 2.0 per cent, while the share of doubtful assets in total NPAs declined to 50.5 per cent. At the consolidated level, capital adequacy strengthened, with CRAR improving to 13.6 per cent, and only two StCBs reporting CRAR below the regulatory minimum of 9 per cent.
District Central Co-operative Banks recorded a moderation in balance sheet growth during 2024-25, with total assets and liabilities increasing by 8.1 per cent to Rs 8.28 lakh crore from Rs 7.66 lakh crore a year ago. Deposits grew by 6.8 per cent to Rs 5.09 lakh crore, with CASA deposits accounting for a high 40.5 per cent, reflecting DCCBs’ wider rural branch network. Borrowings rose by 11.1 per cent to Rs 1.80 lakh crore, of which borrowings from StCBs constituted 89.3 per cent and NABARD refinance 9.2 per cent.
On the asset side, loans and advances of DCCBs grew by 7.9 per cent to Rs 4.55 lakh crore, while investments increased by 8.7 per cent to Rs 2.89 lakh crore, largely placed as term deposits with other banks.
With credit growth exceeding deposit growth, the credit-deposit ratio of DCCBs improved to 87.6 per cent at end-March 2025 from 86.7 per cent a year earlier. The share of agricultural loans in total advances stood at 53.6 per cent, marginally lower than the previous year.
Financial performance of DCCBs improved during the year. Total income increased by 11.0 per cent to Rs 58,181 crore, while expenditure rose by 11.0 per cent to Rs 56,057 crore. Net profits grew by 12.1 per cent to Rs 2,124 crore, aided by lower provisioning requirements and higher other income, even as growth in net interest income moderated due to higher interest expenses.
Asset quality of DCCBs improved for the fifth consecutive year, with the gross NPA ratio declining to 8.7 per cent at end-March 2025, though it remained higher than that of StCBs. The net NPA ratio moderated to 3.0 per cent from 3.4 per cent a year ago.
Capital adequacy of DCCBs remained broadly stable at around 12 per cent, while the number of banks with CRAR below the regulatory minimum declined to 38, with over 75 per cent of these concentrated in Madhya Pradesh, Punjab, Rajasthan and Maharashtra.
Overall, State Co-operative Banks and District Central Co-operative Banks recorded steady growth in deposits and advances during 2024-25, alongside continued improvement in asset quality, reaffirming their key role in rural credit delivery.
Despite pressure on profitability from rising costs, both segments remained largely profitable and well capitalised, indicating a gradual strengthening of the short-term rural co-operative banking structure.
