In the June 2025 issue of its financial stability report, the central bank said the domestic financial system is exhibiting resilience fortified by healthy balance sheets of banks and non-banks.
Financial conditions have eased supported by accommodative monetary policy and low volatility in financial markets. The strength of the corporate balance sheets also lends support to overall macroeconomic stability, it observed.
“Financial markets remain volatile, especially core government bond markets, driven by shifting policy and geopolitical environment. Alongside, existing vulnerabilities such as soaring public debt levels and elevated asset valuations have the potential to amplify fresh shocks,” an RBI release said, citing the document.
The soundness and resilience of scheduled commercial banks (SCBs) are bolstered by robust capital buffers, multi-decadal low non-performing loans ratio and strong earnings, it noted.
Results of macro stress tests affirm that most SCBs have adequate capital buffers relative to the regulatory minimum even under adverse stress scenarios. Stress tests also validate the resilience of mutual funds and clearing corporations.
Non-banking financial companies remain healthy with sizable capital buffers, robust earnings and improving asset quality, RBI added.
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