India's banking sector demonstrated a strong turnaround in 2025, according to the Ministry of Finance. Key reforms, including digital payment advancements and financial inclusion efforts, contributed to enhanced stability and governance. The Gross Non-Performing Asset ratio for Scheduled Commercial Banks fell to 2.22% by March 2025, with Public Sector Banks at 2.58%. Digital payment volumes surged, and banks reported record profits, with aggregate net profit reaching Rs 1.78 lakh crore for PSBs and Rs 4.01 lakh crore for all Scheduled Commercial Banks in FY 2024-25.