Globally, India is one of the top 10 economies, where the banking sector has great potential to grow sustainably, expand and penetrate across different economic segments and geographic regions of the country. According to the industry report, it has the potential to become the 3rd largest banking industry by 2030. Banking involves facilitation and execution of wide array of varied transaction, some of which may be suspicious transactions which is generally not in conformity with the prevailing regulations and law of the land. In order to detect suspicious transactions, mechanism of reporting such transaction, as well as complying with Anti-Money Laundering (AML) regulations and associated compliance are essential. This aids in sustaining the integrity of financial systems and preventing circulation of illicit funds through the financial systems. To ensure integrity, stability, and transparency within the financial sector which is typically diverse, the compliance culture in Indian Banks (IBs) plays a critical role. Compliance culture, which confirms observance to regulatory requirements, promotes ethical behavior, and moderates’ risks related to financial transactions, is an integral component of banking operations. Robust compliance culture acts as a crutial support in implementing preventive measures to confront misuse of banking services for illegal purposes. A robust compliance framework becomes increasingly vital for India to continue its economic growth, expansion of financial sector and crediably globalise its presence. Hence, the different aspects of compliance culture within IBs are analyzed in this paper, which highlights its significance and challenges. The importance of compliance culture in IBs, Components of compliance culture in IBs, perspectives of compliance culture in IBs, Policies of compliance culture in IBs, and challenges of compliance culture in IBs are explored in this paper.