The domestic financial system remains resilient, backed by strong capital positions, ample liquidity, easy financial conditions and low market volatility, the Reserve Bank of India (RBI) said in its December 2025 Financial Stability Report (FSR).

The country's scheduled commercial banks remain in sound health, with strong capital and liquidity buffers, improved asset quality and robust profitability, the report said. Stress tests showed banks would be able to withstand losses under hypothetical adverse scenarios while maintaining capital well above regulatory minimums.

The central bank noted that under a baseline scenario, the gross non-performing assets (GNPA) ratio of banks is expected to improve further to 1.9 per cent by March 2027. As of September 2025, the GNPA ratio stood at 2.1 per cent, a multi-decade low, according to the half-yearly report.

Powered by Capital Market - Live News