- The Reserve Bank of India (RBI) released its Financial Stability Report on December 29, 2021.
- According to the report, stress tests have revealed that gross non-performing assets (GNPAs) of banks is likely to jump from 6.9 percent in September 2021 to 8.1 percent in September 2022 under the baseline scenario.
- While under a severe stress scenario, it is likely to increase to 9.5 percent for the same period.
- Report highlights that, scheduled Commercial Banks have sufficient capital, at the aggregate as well as individual levels, even under stress conditions
- The report further highlights the collective assessment of Sub-Committee of the Financial Stability & Development Council (FSDC) on risks to financial stability as well as resilience of the financial system.
- It notes that, progress in vaccination on the domestic front has enabled the recovery to regain traction after debilitating second wave of Covid-19 pandemic.
- However, signs of slowing pace were witnessed more recently.
- Corporate sector is gaining strength and bank credit growth is also improving.
Tags:
Economics
