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homefinance NewsRBI's 26th financial stability report spots silver linings — highlights here

RBI's 26th financial stability report spots silver linings — highlights here

A floating demand for bank credit as well as early signs of investment cycle revival are benefiting from the improved asset quality, return to profitability and strong capital and liquidity buffers of scheduled commercial banks (SCBs), the RBI said.

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By CNBCTV18.com Dec 29, 2022 7:54:06 PM IST (Published)

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RBI's 26th financial stability report spots silver linings — highlights here

Even as the Indian economy combats strong global headwinds, sound macroeconomic fundamentals as well as healthy financial and non-financial sector balance sheets offer room for cautious optimism, the Reserve Bank of India's 26th issue of the financial stability report stated. The report reflects the Financial Stability and Development Council (FSDC) sub-committee’s collective assessment on the risks to financial stability as well as the financial system's resilience.

Here are highlights of the report: 


  • Recessionary risks are looming large as the global economy is facing formidable headwinds. As a result of the interplay of multiple shocks, financial conditions have tightened and there is a heightened volatility in the financial markets.
  • The floating demand of bank credit as well as early signs of investment cycle revival are benefiting from the improved asset quality, return to profitability and strong capital and liquidity buffers of scheduled commercial banks (SCBs), the RBI said in a statement.
  • "The gross non-performing asset (GNPA) ratio of scheduled commercial banks (SCBs) fell to a seven-year low of 5.0 percent and net non-performing assets (NNPA) have dropped to 10-year low of 1.3 percent in September 2022," the statement added.
  • The credit risk's macro stress tests reveal that SCBs can comply with the minimum capital requirements under severe stress scenarios as well. The capital to risk weighted assets ratio (CRAR) at the system level in September 2023, is under baseline, medium and severe stress scenarios, and is projected at 14.9 percent, 14 percent and 13.1 percent, respectively.
  • For open-ended debt mutual funds, the stress tests showed there was no breach in limits regarding interest rate, credit as well as liquidity risks. For both life and non-life insurance companies, the consolidated solvency ratio remained above the prescribed minimum level.
    • Also Read: Current account deficit swells to all-time high of $36.4 billion in Q2
    (Edited by : Shoma Bhattacharjee)
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    RBI financial stability reportReserve Bank of India

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