Indian Financial System stays strong as RBI releases Stability Report

Highlights

Global Economic Landscape: The global financial system is resilient, but medium-term risks like stretched asset valuations, high public debt, geopolitical tensions, and emerging technologies persist.

Indian Economy: Strong macroeconomic fundamentals and healthy balance sheets support resilience in the domestic financial system.

Scheduled Commercial Banks (SCBs):

• Decadal-high profitability (RoA and RoE)
• Multi-year low Gross Non-Performing Asset (GNPA) ratios
• Capital and liquidity buffers ensure stability even under stress scenarios

Non-Banking Financial Companies (NBFCs):

• Robust capital buffers and improving asset quality
• Strong earnings and interest margins maintain sector health

Insurance Sector: Solvency ratios remain above minimum thresholds.

Market Entities: Stress tests validate the flexibility of mutual funds and clearing corporations, essential for smooth financial operations.