Non-banking financial companies (NBFCs) saw their balance sheets expand by 18.9% in FY25, reaching ₹61.09 lakh crore, driven by strong loan growth. While overall asset quality improved with a decline in GNPA to 2.9%, the microfinance sector experienced a significant rise in bad loans. Profitability for upper-layer NBFCs increased, though overall NBFC profits saw a slight dip. Capital adequacy remained robust.