A Reserve Bank of India report indicates that Small Finance Banks (SFBs) experienced a decline in asset quality and profitability during FY25. Gross non-performing assets (GNPA) rose to 3.6% from 2.4% a year prior, while net profit decreased significantly due to increased provisions. Despite these challenges, SFBs maintained robust balance sheet growth and remained well-capitalized with a capital adequacy ratio of 21.5%.