Mumbai: reserve Bank of India The 28th issue of the Financial Stability Report, December 2023, was released on Thursday, reflecting the collective assessment of the sub-committee of the Financial Stability and Development Council (FSDC) on risks to the financial stability and resilience of the Indian financial system.
According to reserve Bank of India Report, Scheduled Commercial banks‘gross non-performer Property (GNPA) ratio continued decline It reached a multi-year low of 3.2 per cent and the net non-performing assets (NNPA) ratio at 0.8 per cent in September 2023.
The RBI further said that the Indian economy and the domestic financial system remain resilient, supported by strong macroeconomic fundamentals and healthy balance sheets of financial institutions, deceleration in inflation, improving external sector conditions and continued fiscal consolidation.
However, the RBI also said the global economy faces several challenges: prospects of slower growth; large public debt; increasing economic fragmentation; and prolonging geopolitical conflicts.
According to the report, the capital-to-risk-weighted assets ratio (CRAR) and common equity tier 1 (CET1) ratio of scheduled commercial banks (SCBs) stood at 16.8 per cent and 13.7 per cent respectively in September 2023.
“Macro stress tests for credit risk show that SCBs will be able to comply with the minimum capital requirements, with the system-level CRAR in September 2024 projected at 14.8 per cent, 13.5 per cent and 12.2 per cent under the baseline, medium and severe, respectively. Stress scenario,” the RBI report said.
Further, the RBI said the resilience of the non-banking financial companies (NBFC) sector has improved with CRAR at 27.6 per cent, GNPA ratio at 4.6 per cent and return on assets (ROA) at 2.9 per cent in September 2023. ,
Financial Stability Reports, published by the Reserve Bank of India, are periodic exercises to review the nature, magnitude and implications of risks bearing on the macroeconomic environment, financial institutions, markets and infrastructure. These reports also assess the resilience of the financial sector through stress tests.
According to reserve Bank of India Report, Scheduled Commercial banks‘gross non-performer Property (GNPA) ratio continued decline It reached a multi-year low of 3.2 per cent and the net non-performing assets (NNPA) ratio at 0.8 per cent in September 2023.
The RBI further said that the Indian economy and the domestic financial system remain resilient, supported by strong macroeconomic fundamentals and healthy balance sheets of financial institutions, deceleration in inflation, improving external sector conditions and continued fiscal consolidation.
However, the RBI also said the global economy faces several challenges: prospects of slower growth; large public debt; increasing economic fragmentation; and prolonging geopolitical conflicts.
According to the report, the capital-to-risk-weighted assets ratio (CRAR) and common equity tier 1 (CET1) ratio of scheduled commercial banks (SCBs) stood at 16.8 per cent and 13.7 per cent respectively in September 2023.
“Macro stress tests for credit risk show that SCBs will be able to comply with the minimum capital requirements, with the system-level CRAR in September 2024 projected at 14.8 per cent, 13.5 per cent and 12.2 per cent under the baseline, medium and severe, respectively. Stress scenario,” the RBI report said.
Further, the RBI said the resilience of the non-banking financial companies (NBFC) sector has improved with CRAR at 27.6 per cent, GNPA ratio at 4.6 per cent and return on assets (ROA) at 2.9 per cent in September 2023. ,
Financial Stability Reports, published by the Reserve Bank of India, are periodic exercises to review the nature, magnitude and implications of risks bearing on the macroeconomic environment, financial institutions, markets and infrastructure. These reports also assess the resilience of the financial sector through stress tests.