MUMBAI, Dec 27 Reuters Indian banks39; gross nonperforming asset GNPA ratio continued to improve in the second quarter of the current financial year, easing to a fresh decadal low, a Reserve Bank of India report published on Wednesday showed.

The improvement in the asset quality of banks that began in 201819 continued into the first half of 202324, with the GNPA ratio falling to 3.2 at endSeptember from 3.9 at endMarch, the RBI said in its 39;Trend and Progress of Banking39; report.

The central bank said the banking system and the nonbanking financial companies NBFCs remain resilient, backed by high capital ratios, improved asset quality and robust earnings growth.

This is supporting doubledigit credit growth and domestic economic activity, the RBI said.

Sustaining this improvement requires further strengthening of governance and risk management practices and building up of additional buffers.

The GNPA ratio remained the highest for the agricultural sector and the lowest for retail loans, the report showed.

The consolidated balance sheet of commercial banks grew by 12.2 in 202223, the highest in nine years, driven mainly by credit growth expanding at its fastest pace in more than a decade, the report said.

During 202223, the total amount of frauds reported by banks declined to a sixyear low, while the average amount involved in frauds was the lowest in a decade, the RBI said.

Even NBFCs39; balance sheets expanded at a fast pace in 202323, led by doubledigit…