India's financial regulators fostering shock-resilient systems: RBI Governor Shaktikanta Das
India's net non-performing assets ratio of banks declined to a multi-year low of 0.8% at the end of September 2023. "The resilience of the non-banking financial companies (NBFCs) sector improved with CRAR at 27.6 percent, GNPA ratio at 4.6 percent and return on assets (ROA) at 2.9 percent, respectively, in September 2023," the report said.
Governor Shaktikanta Das affirmed the commitment of the central bank to act early and decisively to prevent any build-up of risks to the Indian economy. The Financial Stability Report (FSR) informed that the gross non-performing assets (GNPA) ratio of banks also declined to a multi-year low of 3.2%.
The report elaborated on the financial status of scheduled commercial banks (SCBs), revealing that as of September 2023, these banks maintained a capital-to-risk-weighted assets ratio (CRAR) of 16.8 percent and a common equity tier 1 (CET1) ratio of 13.7 percent. "Macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in September 2024 projected at 14.8 percent, 13.5 percent, and 12.2 percent, respectively, under baseline, medium, and severe stress scenarios," the report said.
The FSR report delves into the resilient aspects of the Indian economy and says the domestic financial system remained resilient, supported by strong macroeconomic fundamentals, healthy balance sheets of financial institutions, moderating inflation, improving external sector position and continuing fiscal consolidation. (With inputs from PTI)Milestone Alert!
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