The objective of this research is to analyze the progression of risk management within the banking industry in India, with a specific emphasis on the profound effects of the liberalization and deregulation measures implemented in 1991. The analysis delves into many classifications of risk, encompassing credit, market, and operational risks, with specific emphasis on the problem presented by Non-Performing Assets (NPAs). The study highlights the crucial significance of the Basel requirements in bolstering risk management frameworks, hence improving banks’ ability to withstand financial shocks. This underscores the significance of implementing comprehensive risk identification, assessment, and mitigation techniques in order to safeguard the stability of the industry. Furthermore, this study applies insights derived from worldwide financial crises to underscore the imperative of ongoing enhancement in risk management methodologies, with the objective of enabling Indian banks to effectively navigate the progressively intricate financial environment.