financial stability report for 1 July 2025

by Vajiram & Ravi - 1 July 2025

Vajiram & Ravi provides Daily financial stability report for 1 July 2025, tailored for aspirants. We cover all relevant news and events crucial for the exam, ensuring you stay updated & well-prepared.

Financial Stability Report 2025

July 1, 2025
Financial Stability Report

Financial Stability Report Latest News

The Reserve Bank of India (RBI) recently released the Financial Stability Report for June 2025.

About Financial Stability Report 

  • It is a biannual report released by the Reserve Bank of India (RBI).
  • It reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability.

Highlights of Financial Stability Report for June 2025

  • The Indian economy remains a key driver of global growth on the back of sound macroeconomic fundamentals and prudent policies.
  • The headwinds from protracted geopolitical tensions, elevated uncertainty and trade disruptions, and weather-related uncertainty pose downside risks to growth.
  • The non-performing loans ratio is currently at a multi-decadal low, and the economy and financial system are relatively well positioned to bear the tariff-induced shocks.
  • The report said that the gross non-performing asset (GNPA), which is currently as of March 2025 at 2.3% levels, in the baseline scenario, could increase to 2.5% level.
  • GNPAs for 46 banks accounting for 98 percent of the total assets of scheduled commercial banks (SCBs), may rise to 2.6 percent by March 2027.
  • Capital adequacy across the banking sector remains well above regulatory thresholds, giving banks sufficient buffers to withstand adverse scenarios. 
  • Even under severe stress test conditions, the capital adequacy ratios of banks would stay comfortably above minimum requirements, a strong signal of the sector’s preparedness to absorb economic shocks.
  • India's growth is largely dependent on domestic demand, and the outlook for food inflation remains favorable as the prices have started to soften and the crop production is at a record level.
  • On the domestic front, the financial system remains stable, with healthy balance sheets of both banks and non-banking financial institutions.
  • NBFCs remain healthy with good capital buffers, robust earnings, and improving asset quality.

Source: LIVEM

Financial Stability Report FAQs

Q1: Who releases the Financial Stability Report (FSR)?

Ans: It is a biannual report released by the Reserve Bank of India (RBI).

Q2: According to FSR June 2025, the current Gross Non-Performing Asset (GNPA) ratio as of March 2025 stands at:

Ans: 2.3%

Q3: What is the status of capital adequacy across the Indian banking sector, as per the recent Financial Stability Report?

Ans: Well above regulatory thresholds.

Q4: According to the recent Financial Stability Report, what trend is observed in food inflation?

Ans: Softening with record crop production.

Q5: What does the recent Financial Stability Report say about the health of NBFCs?

Ans: Stable with improving asset quality and strong capital buffers

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