New Delhi, July 1 -- India's banking sector remains resilient with strong capital buffers, healthy asset quality, robust profitability and adequate liquidity, according to the Reserve Bank of India's (RBI) latest Financial Stability Report.

The report also noted that rising funding costs and intensifying competition for deposits are emerging as key challenges.

Banking Sector Remains Financially Strong

The RBI report said the banking sector has strengthened steadily in recent years, with key indicators such as capital adequacy, liquidity, profitability, asset quality and loan-loss provisions remaining robust, reported Economic Times.

It added that there are no signs of emerging stress, with Special Mention Account-2 (SMA-2) loans and c...