India's banking sector demonstrated resilience in 2024-25, with gross non-performing assets (GNPA) falling to a multi-decadal low of 2.1% by September 2025. This improvement, driven by recoveries, upgrades, and write-offs, was observed across scheduled commercial banks, including public sector banks. Profitability remained robust, with capital buffers well above regulatory requirements. However, Small Finance Banks experienced a rise in GNPA, signaling stress in certain retail portfolios. Banks also face ongoing competition for resource mobilization.