Financial system resilient amid global turmoil: RBI

AT A TIME when global uncertainties loom large, India's financial system remains resilient and well-capitalised, the Reserve Bank of India (RBI) said in its latest Financial Stability Report (FSR).

- FE BUREAU

The report, released on Monday, pointed out that the country's scheduled commercial banks (SCBs) have significantly improved their asset quality, with gross non-performing assets (GNPAs) hovering near multi-decade lows.

It also noted that even under severe stress test conditions, the capital adequacy ratios of banks would stay comfortably above minimum requirements, a strong signal of the sector's preparedness to absorb economic shocks. "Results of stress tests reaffirm the strength of the banking and non-banking sectors with capital levels projected to remain well above the regulatory minimum even under adverse shock scenarios. The healthy balance sheets of corporates, banks and non-banking financial companies (NBFCs) augur well for the economy," RBI governor Sanjay Malhotra said in the report.

Malhotra, however, emphasised that there are many structural shifts reshaping the global economy, including growing fragmentation in trade, rapid technological disruption, ongoing climate change, and protracted geopolitical hostilities.

"THEY MAKE ECONOMIC forecasts difficult and policy interventions challenging.