Last Updated:
Despite the improving domestic outlook, the report cautioned that global financial stability risks remain elevated.
The report also flagged several structural vulnerabilities that could amplify future shocks, including elevated public debt levels, fragilities in global bond markets, stretched asset valuations and high leverage among non-bank financial institutions (NBFIs).
India’s strong macroeconomic fundamentals have placed the country in a better position than many of its global peers to withstand external shocks, the Reserve Bank of India (RBI) said in its Financial Stability Report (FSR) for June 2026, released on Tuesday.
The report, prepared by the Sub-Committee of the Financial Stability and Development Council (FSDC), assesses the resilience of India’s financial system and identifies key risks to financial stability.
Recommended Stories
-
Stock Market Closing Bell: Sensex Loses 250 Points, Nifty Ends Below 23,900; IT Index Slumps 2.7%
-
Stock Market Opens Higher: Sensex Rises Over 190 Points, Nifty Nears 24,000; Banking Lead Gains
-
Stocks In Focus Today: HDFC Bank, Yes Bank, Biocon, Tech Mahindra, BPCL, Bajaj Auto, Axis Bank
-
HDFC Bank Appoints Former CEC Rajiv Kumar As Part-Time Chairman; Shares In Focus
The RBI said India’s sound macroeconomic fundamentals provide greater resilience to external disruptions than during previous global crises.
The central bank added that the balance of risks has improved, supported by the interim peace agreement in West Asia and recent policy measures taken by the Government and the RBI to strengthen capital inflows.
RBI Warns of Global Financial Risks
Despite the improving domestic outlook, the report cautioned that global financial stability risks remain elevated. According to the RBI, persistent supply chain disruptions could tighten global financial conditions and reignite inflationary pressures.
The report also flagged several structural vulnerabilities that could amplify future shocks, including elevated public debt levels, fragilities in global bond markets, stretched asset valuations and high leverage among non-bank financial institutions (NBFIs).
Indian Banking System Remains Strong
The RBI said India’s domestic financial system continues to remain resilient, supported by healthy balance sheets across banks and non-bank financial institutions.
According to the report, Scheduled Commercial Banks (SCBs) remain “safe and sound”, backed by: Strong capital and liquidity buffers, and continued improvement in asset quality.
The RBI’s macro stress tests also indicated that the banking system is well-positioned to withstand adverse economic scenarios.
“Aggregate capital ratios are projected to remain comfortably above regulatory thresholds even under hypothetical adverse scenarios,” the report said.
NBFCs and Insurance Sector Also Resilient
The report said Non-Banking Financial Companies (NBFCs) remain financially healthy, supported by strong capitalisation, improving asset quality and healthy profitability.
The insurance sector also continues to demonstrate resilience, with the solvency ratio of life insurers remaining comfortably above the regulatory minimum.
Overall, the RBI said India’s financial system remains robust despite an uncertain global environment, with banks, NBFCs and insurers maintaining adequate capital buffers to absorb potential future shocks.
About the Author
Saurabh Verma covers general, national and international day-to-day news for News18.com as a Chief Sub-editor. He keenly observes politics. You can follow him on Twitter –twitter.com/saurabhkverma19
Read More
Source link
[ad_3]
