New Delhi, May 15 -- Indian banks continue to remain financially stable despite pressure on profit margins after recent interest rate cuts, with bad loans still largely under control, according to a banking sector report by Systematix Institutional Equities.

The report said banks are beginning to feel the impact of lower lending rates following the Reserve Bank of India's repo rate cut in December 2025, which has reduced the interest income earned by banks on loans. However, the overall health of the banking system remains steady.

Referring to fresh loans turning into bad loans or non-performing assets (NPAs), the report noted, "The slippages in the quarter were broadly in control."

According to the report, most banks reported stable a...