Why in News?
RBI’s latest Financial Stability Report (FSR) highlights India’s role as a key driver of global growth despite global uncertainty, citing strong domestic demand, sound macroeconomic policies, robust banking resilience, and improved capital buffers with low levels of non-performing assets.
Description:
- Released by: Reserve Bank of India (RBI)
- Frequency: Twice a year (biannual)
- Purpose: Assesses India’s financial system stability, banking resilience, and risks.
- Includes:
- Systemic Risk Survey (SRS)
- Inputs from all financial sector regulators
- The latest FSR highlights that India remains a key driver of global growth despite a challenging global backdrop.
- Released amid rising global public debt and financial tightening in other countries.
Significance:
- Indicates strength of banking & NBFC sectors, macroeconomic stability, and capital adequacy.
- Helps assess risks like NPAs, global spillovers, capital outflows, and fiscal vulnerability.
- Essential to gauge financial system resilience and preparedness for future shocks.
Key Highlights (Latest Report):
Domestic Economy:
- Growth momentum is strong due to sound domestic demand and prudent macroeconomic policies.
- Confidence in alignment of inflation with RBI’s inflation target has improved.
Financial System Resilience:
- Strong capital buffers, low NPAs, and robust profitability have enhanced resilience.
- Stress tests show that both banks and NBFCs are well-capitalized even under adverse scenarios.
Key Ratios:
- GNPA (Gross Non-Performing Assets):
5% as of Sep 2022 – 7-year low
Indicates improved asset quality
- CRAR (Capital to Risk-weighted Assets Ratio):
Avg: 15.8% for 46 major banks
Way above RBI’s minimum requirement of 9%
NBFC Sector:
- Strong post-Covid recovery
- Improved asset quality
- Resilience adds positively to economy-wide financial health
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2025 preparation.
FOLLOW US ON:
◉ YouTube : https://www.youtube.com/@CivilsPrepTeam
◉ Facebook: https://www.facebook.com/LaExcellenceIAS
◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040
