The Reserve Bank of India (RBI) on Thursday mentioned the Indian financial system is nicely on the trail of restoration regardless that inflationary pressures and geopolitical dangers warrant cautious dealing with and shut monitoring of the state of affairs. The RBI’s twenty fifth Financial Stability Report (FSR) additionally mentioned banks in addition to non-banking monetary establishments have adequate capital buffers to face up to shocks.
“Notwithstanding the challenges from global spillovers, the Indian economy remains on the path of recovery, though inflationary pressures, external spillovers and geopolitical risks warrant careful handling and close monitoring,” the report mentioned.
The report noticed that the outlook for the worldwide financial system is shrouded by appreciable uncertainty due to the conflict in Europe, front-loaded financial coverage normalisation by central banks in response to persistently excessive inflation and a number of waves of the coronavirus pandemic.
Regarding the banking sector, it mentioned the Capital to Risk weighted Assets Ratio (CRAR) of Scheduled Commercial Banks (SCBs) rose to a brand new excessive of 16.7 per cent whereas their Gross Non Performing Assets (GNPA) ratio fell to a six-year low of 5.9 per cent in March 2022.
Macro stress assessments for credit score threat reveal that SCBs would be capable to adjust to the minimal capital necessities even underneath extreme stress situations, it added.
Source: www.financialexpress.com”