<h1>Indian Banking Sector Reforms: Tackling Asset Quality, Capital Shortfalls, and Regulatory Strengthening in PSBs and NBFCs.</h1> The Indian banking sector is undergoing transformation, addressing challenges like deteriorating asset quality and weak capital positions. Recent policy measures aim to enhance resilience through strengthened regulatory frameworks. Public Sector Banks (PSBs) have benefited from government capital infusion but still face capital shortfalls. The Insolvency and Bankruptcy Code (IBC) has improved credit culture, though delays in resolution persist. Non-Banking Financial Companies (NBFCs) are under increased regulatory scrutiny due to vulnerabilities highlighted by recent defaults. Governance reforms, risk management, and digital payment advancements are prioritized. The Reserve Bank of India focuses on creating a robust financial system through continuous regulatory improvements.