The Indian banking industry must deal with a multitude of challenges as part of a developing economy that may have an impact on its profitability and financial stability. Banking professionals will be in a better position to avoid financial crises and support the financial stability of their banks by having a greater awareness of the problems they face.

In the current economic situation, non-performing assets and restructured assets pose the biggest danger to the Indian banking industry. These problematic loans have a negative impact on a bank’s profitability. The decreased ability of banks to raise capital to enhance their capital is another issue. If a bank has too many subprime loans over time and insufficient capital, it may eventually suffer significant losses. This is turning into a bigger issue for India’s public sector banks.