A group of banks that include National Bank of India and State Bank of Rajasthan have filed for bankruptcy.
The banks have failed to repay their loans to the central government.
The filing was first reported by Reuters.
The government is trying to rescue banks that are struggling to repay huge loans to their depositors, as well as to the public.
The bank failures were caused by a collapse in the prices of precious metals and gold, which in turn have depressed demand for these metals.
In its most recent report, the government estimated that the economy lost an additional 3.2 trillion rupees ($460 billion) as a result of the losses.