Financial Stability Report

Reserve Bank of India (RBI) has published 26th edition of Financial Stability Report on December 29. RBI publishes this report biannually. It reflects the collective assessment of the Sub-Committee of Financial Stability and Development Council on risk to financial stability and the resilence of the finaicial system.

What are the key highlight of 26th Financial Stability Report?

• Global Economy is facing formidable recession risks.
• Due to multiple shocks, financial conditions have tightened and the financial market is confronting heightened volatility.
• Indian Economy is also facing strong global headwinds.
• But sound macroeconomic fundamentals and a healthy financial sector balance sheet are providing strength and resilience to India’s financial system.
• Gross Non-Performing Asset (GNPA) of scheduled commercial banks has fallen to a seven-year low of 5%.
• Non-Performing Assets stood at a ten-year low of 1.3% in September.
• Macro stress test for credit risk against macroeconomic shock reveals that even under severe stress scenario, SCB will be able to comply with 8% minimum capital requirement.
• In a stress test, open-ended mutual funds showed no breach of the limit regarding interest rate, credit and liquidity risk.

Financial Stability Report predicts various challenge for Indian economy in 2023

• Capital outflow and currency depreciation,
• Debt distress and rising borrowing costs,
• Volatile commodity prices and elevated inflation level.

Don’t miss: Indian Economy in 2023 : Opportunities and Challenges 

About Reserve Bank of India (RBI)

• RBI is the central bank of India, established under the provisions of the Reserve Bank of India Act, 1934.
• It was nationalized in 1949 on the basis of the RBI (Transfer of Ownership) Act, 1948.
• RBI is responsible for the regulation of Indian banking system.
• RBI has established NPCI to regulate the payment and settlement system in India.
• It is also responsible for the formulation of India’s monetary policy.
• Shaktikant Das is the current and 25th Governor of RBI.

Various reports published by RBI

• Report on Trend and Progress of Banking in India
• Survey on Climate Risk and Sustainable Finance Report
• Interest Subvention Report
• Financial Stability Report
• Monetary Policy of India
• Handbook of Statistics on Indian Economy
• Quarterly Statistics on Deposits and Credits of SCBs