Indian banks' profits were severely impacted by these two things

NIMs declining for the last three years is one.

Slow credit growth and deterioration in asset quality impacted the income growth of banks as well as profitability during FY17. The 35 banks studied by CARE Ratings showed moderate growth of 6% due to interest reversals on NPA accounts as well as a low credit growth.

Though, fee based income and treasury gains in a declining interest scenario helped non-interest income increase by 32% during FY17. Public sector banks (PSBs) reported growth of 3% in total income while private banks reported growth of 13% during FY17.

Here's more from CARE Ratings:

The Net Interest Margin (NIM) has seen a declining trend over the last three years largely on account of decline in margins of PSBs. The private sector banks have been able to maintain their NIM in the range of 3.40% to 3.60% over the last three years.

In addition to decline in margins, the rise in NPAs led to banks especially PSBs to see a significant rise in provisioning which severely impacted the profits of the banks. During FY16, 12 out of the 21 PSBs reported loss and during FY17, 10 PSBs reported loss.

In the private sector, only one bank each reported loss during F16 and FY17 respectively. The overall Return on Total Assets (ROTA) for public sector banks was negative for FY16 while it was near zero for FY17.