{"id":52803,"date":"2025-07-01T12:14:17","date_gmt":"2025-07-01T06:44:17","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=52803"},"modified":"2025-07-01T12:14:17","modified_gmt":"2025-07-01T06:44:17","slug":"rbi-report-india-continues-to-power-global-growth","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/rbi-report-india-continues-to-power-global-growth\/","title":{"rendered":"RBI Report, India Continues to Power Global Growth"},"content":{"rendered":"<h2><b>RBI Report Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite global economic uncertainty, the Indian economy continues to drive global growth, supported by strong fundamentals and prudent policies, according to RBI&#8217;s latest Financial Stability Report.<\/span><\/li>\n<\/ul>\n<h2><b>Financial Stability Report (FSR)<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">FSR is a biannual publication released by the Reserve Bank of India (RBI).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It provides a comprehensive assessment of the health, resilience, and risks facing the Indian financial system.<\/span><\/li>\n<\/ul>\n<h3><b>Purpose<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To ensure transparency, promote public confidence, and guide policy actions aimed at preserving financial stability in India.<\/span><\/li>\n<\/ul>\n<h3><b>Key Features<\/b><\/h3>\n<ul>\n<li aria-level=\"1\"><b>Published Twice a Year<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Released in June and December to give regular updates.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Covers Entire Financial System<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Includes banks, non-banking financial companies (NBFCs), cooperative banks, and other financial intermediaries.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Assesses Systemic Risks<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Evaluates both domestic and global risks that may affect India\u2019s financial stability.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Stress Tests<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Conducts stress testing on banks to gauge their ability to withstand adverse economic conditions (like high NPAs, credit shocks, etc.).<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Policy Guidance<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Offers insights for regulators and policymakers on maintaining stability and resilience.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\u00a0<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\u00a0<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\u00a0<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\u00a0<\/li>\n<\/ul>\n<h2><b>Key Highlights of the June 2025 Financial Stability Report (FSR)<\/b><\/h2>\n<ul>\n<li><b>India Remains a Key Global Growth Driver<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Despite a challenging global environment, India continues to contribute significantly to global growth.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Growth is supported by <\/span><span style=\"font-weight: 400;\">strong domestic demand, sound macroeconomic fundamentals, and prudent policymaking<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>GDP Growth Outlook for FY26<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Real GDP growth projected at 6.5% for FY2026.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Growth remains below RBI&#8217;s aspirations, constrained by global uncertainty, trade disruptions, and elevated geopolitical tensions.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Risks to Growth: External and Climate-Linked<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">External spillovers (e.g., US tariffs, global trade fragmentation) and weather-related events (e.g., climate shocks) may impact India\u2019s growth.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Geopolitical risks and policy unpredictability have raised global economic uncertainty.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Inflation Under Control<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Inflation outlook is benign, with CPI aligning with RBI\u2019s target of 4% \u00b1 2% band.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">May 2025 CPI at 2.8%, the lowest since February 2019.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">RBI expresses greater confidence in durable price stability under the Flexible Inflation Targeting (FIT) framework.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Financial Stability and Sectoral Resilience<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Indian financial system shows improving resilience, with:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Strong capital buffers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Low non-performing assets (NPAs)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Healthy profitability<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Stress Tests Confirm Systemic Strength<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Stress tests show that:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Banks and NBFCs maintain adequate capital even under adverse scenarios.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Mutual funds and clearing corporations show strong resilience.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Insurance sector maintains a solvency ratio well above minimum thresholds.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Scheduled Commercial Banks (SCBs) in Strong Health<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">SCBs benefit from:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Multi-decadal low NPAs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Robust capital and earnings<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Macro stress tests validate that most SCBs are adequately capitalized.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>NBFCs and Corporate Sector Remain Robust<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">NBFCs exhibit:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Sizable capital buffers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Improving asset quality<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Strong profitability<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Corporate balance sheets continue to support macroeconomic stability.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Financial Conditions Remain Supportive<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Financial conditions have eased due to:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Accommodative monetary policy<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Low market volatility<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Global Financial System: Elevated Risks<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Near-term global financial stability risks have increased.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">April 2025\u2019s market turbulence exposed vulnerabilities and high asset price sensitivity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Risks from high public debt, tech disruptions, climate change, and prolonged conflicts remain significant.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Systemic Risk Perception: Medium but Stable<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Systemic Risk Survey (SRS) in May 2025:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">All major risk categories rated as \u2018medium risk\u2019<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">92% respondents are confident in the soundness of the Indian financial system.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><b>Need for Policy Vigilance<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">The report emphasizes the need for vigilance, agility, and prudence among central banks and regulators.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">The global economic landscape is becoming harder to forecast due to structural shifts and shocks.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b style=\"font-size: inherit;\">Source:<\/b> <strong><a style=\"font-size: inherit;\" href=\"https:\/\/indianexpress.com\/article\/business\/rbi-governor-growth-10098157\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> |\u00a0<a style=\"font-size: inherit;\" href=\"https:\/\/www.thehindu.com\/business\/indian-economy-remains-a-key-driver-of-global-growth-rbi-report\/article69756308.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India remains a global growth engine, says RBI&#8217;s Financial Stability Report, citing strong fundamentals and resilient financial systems.<\/p>\n","protected":false},"author":18,"featured_media":52849,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[287,1209,59],"class_list":{"0":"post-52803","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-article","9":"tag-rbi-report","10":"tag-upsc-mains-current-affairs","11":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/52803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=52803"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/52803\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/52849"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=52803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=52803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=52803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}