The Reserve Bank of India (RBI), in its recently released 'Report on Trends and Progress of Banking in India 2024-25,' has highlighted that the Indian banking sector, despite its current resilience and robust financial health, will encounter significant competitive pressures and technological challenges in the coming years. The central bank explicitly stated that competition from non-bank sources, notably buoyed by domestic capital markets, will continue to impact banks' ability to lend to companies. The increase in funding for the commercial sector during 2024-25 was largely driven by these non-bank avenues, including equity issuances and corporate bonds. Furthermore, the RBI underscored the transformative yet challenging role of rapidly changing technology and digitalization. These advancements are expected to alter how customers engage with banks for savings and credit, simultaneously exposing the banking system to new risks, particularly cybersecurity threats. This necessitates a heightened focus on robust governance frameworks, strong risk management practices, and responsible technology adoption by banks to enhance operational efficiency while safeguarding consumer interests. The report comes at a time when the Indian banking sector has demonstrated strong fundamentals, including multi-decadal low gross non-performing assets (GNPA) ratio, which stood at 2.1% at the end of September 2025, and healthy capital adequacy ratios. While acknowledging these strengths, the RBI's assessment serves as a crucial foresight, urging banks to remain 'on their toes' and adapt strategically to sustain long-term financial stability in a dynamic economic environment.