India’s banking sector is exhibiting resilience despite ongoing market volatility, according to Aditya Shah, Founder of Hercules Advisors. He reports that systemic loan growth is approximately 10%-15%, with deposits also growing around 10%. HDFC Bank has performed well, with loans increasing by 12%-13% and deposits by 14%, aligning with management expectations. However, stock performance may be muted due to issues related to Additional Tier 1 (AT1) bonds and internal governance. Shah highlights that public sector banks, particularly the State Bank of India (SBI), are well-positioned for the next one to two years, while HDFC Bank remains a contrarian pick given its low valuations and growth potential. Smaller lenders, including RBL Bank, Suryoday, and Ujjivan, are also showing signs of recovery in loan growth. Despite these positive indicators, Shah cautions that challenges such as margins, deposits, and global risks could impact the sector. He advises investors to balance opportunities with caution as the banking landscape stabilizes.