Best Banks survey highlights top performers in India's challenging banking sector

India's banking sector is facing challenges due to rising interest rates and liquidity risks. A drop in low-cost deposits is prompting banks to consider increasing deposit rates, which could reduce their profit margins. Unsecured loans are now subject to stricter capital requirements from the Reserve Bank of India. Additionally, the micro-loans segment is experiencing higher delinquency rates, indicating a shift in the credit cycle. The stock market performance of banking and financial services companies has declined significantly, reflecting the sector's struggles amid these pressures.