Indian banks saw strong FY25 growth driven by digital adoption and rising tech spends, with SBI, ICICI, and HDFC leading in innovation, boosting efficiency, revenue, and customer engagement.
(Source: freepik)
Some of the top banks in India, both in the public and private sector, reported robust performance in the financial year 2024-25, delivering healthy growth in profitability and core banking operations, according to data compiled by SBI Research. Even though Q4, 2025 proved to be a challenging quarter for the Indian banking sector as core income and margins remained flat, top Indian banks (SBI, ICICI Bank, and HDFC Bank) continued to reap benefits from their investments in digital. Moreover, the banks reported their investments in technology were ongoing, thereby the compounding effects will reflect in the coming quarters.
FY25: Banks investing heavily on technology
The second largest private sector bank in India, ICICI Bank, reported their technology expenses were 10.7% of the bank’s operating expenses in 2025, as per the company filings.
Anindya Banerjee, Group CFO, ICICI Bank informed over the analyst meet, “We continue to enhance the use of technology in our operations to provide simplified solutions to customers. The technology expenses were about 10.7% of our operating expenses in FY2025.” Given the Operating expenses for ICICI Bank were ₹42,372.32 crore for FY-25, the 10.7 percent technology component would amount to approximately ₹4,533.84 crore for FY-25.
Sandeep Bakshi, MD & CEO, ICICI Bank said, “We will continue to make investments in technology, people, distribution and building our brand.”
India’s biggest private sector bank, HDFC Bank also emphasized on the investments made in technology. Sashidhar Jagdishan, MD & CEO, HDFC Bank said, “We have been doing a lot of work on technology over the last few years and we should start reaping the benefits of the same gradually during the course of the year. This is a space to watch out for, and we shall unveil at the appropriate time,”
The banking behemoth State Bank of India (SBI) also reported considerable increase in its technology budget in FY25. Accordingly the ATM, CDM, Debit Card and other technology expenses for India’s biggest public sector bank grew from ₹10,037 crore in FY24 to ₹10,525 crore in FY25 (4.86% rise). The IT spend showed a steady increase across quarters. For Q4FY25, the expense was ₹3,025 crore, rising from ₹2,757 crore in Q3FY25 (9.69% growth).
Reaping digital dividends
In FY25, ICICI Bank reported a total segment revenue of ₹40,264.12 crore from its Digital Banking operations. This figure represents approximately 25.78% of the overall Retail Banking segment revenue, which stood at ₹1,56,184.68 crore for the same period. The data highlights the growing contribution of digital channels within the bank's retail business, underlining the increasing reliance on technology-driven banking services.
The bank also attributed its tremendous growth in business banking portfolio in FY2025 to ‘technology, digital’, Banerjee said, “The business banking portfolio grew by 33.7% year-on-year and 6.2% sequentially. Fee income increased by 16% year-on-year to ₹6306 crore in this quarter. Fees from retail, rural and business banking customers constituted about 80% of the total fees in this quarter, I think on the digital side, because our technology offerings, digital offerings, and transaction banking capabilities for this segment have been pretty good. And that has driven growth in the business, I would say holistically, both on the lending side as well as on the fee and current account side.”
SBI’s YONO app and alternate channels continue to perform well for the bank. A couple of Generative Artificial Intelligence (GenAI) platforms were also launched by the bank in FY25.
“More than 8.77 crore customers have been registered on YONO with 64% of regular savings bank accounts opened through YONO in FY25,” said C S Setty, SBI Chairman. He further added, "Our alternate channels are performing extremely well today, 98% of the transactions are conducted through the alternate channels. Some channels are expensive, like ATMs and customer service points, but digital channels are cheaper. So, we are trying to see how digital adoption will progress and bring cost efficiencies."
The Bank’s GenAI Chatbot, which assists staff in processing deceased claims settlement was launched on Jan 1, 2025. The Bank's internal documentation GenAI Chatbot launched on February 1, 2025, covers processes, policies, formats, SOPs, etc. Both the tools are built with integrated Responsible AI in the form of guardrails. They are deployed at scale, with access extended to staff across the bank.
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