**Executive Summary**
The Reserve Bank of India released the December 2025 edition of the Financial Stability Report (FSR). The report 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 the risks to financial stability. The release date is December 31, 2025.
**Key Points / Main Content**
*Global Economic & Financial Markets*
* The global economy has been resilient, but downside risks persist due to uncertainty, public debt, and market correction risks.
* Global financial markets appear strong but show growing underlying vulnerabilities due to equities, non-bank financial intermediaries, and stablecoins.
*Indian Economy*
* The Indian economy continues to grow strongly despite global challenges, supported by domestic demand, inflation, and policies.
*Domestic Financial System*
* The domestic financial system is robust and resilient with strong balance sheets and low market volatility.
* Near-term risks exist from geopolitical and trade-related external uncertainties.
*Scheduled Commercial Banks (SCBs)*
* The health of SCBs remains sound, with strong capital and liquidity buffers, improved asset quality, and robust profitability.
* Macro stress tests confirm the resilience of SCBs to withstand losses and maintain capital buffers.
*Non-Banking Financial Companies (NBFCs)*
* NBFCs remain robust supported by capital buffers, earnings, and asset quality.
*Insurance Sector*
* The insurance sector shows balance sheet resilience, with solvency ratio above the minimum threshold.
**Impact Analysis**
* **Scheduled Commercial Banks (SCBs), Mutual Funds and Clearing Corporations**
* **Impact:** SCBs are affirmed to be resilient under stress.
* **Action Required:** Maintain capital buffers above regulatory minimums.
* **Non-Banking Financial Companies (NBFCs)**
* **Impact:** NBFCs remain robust.
* **Action Required:** Maintain strong capital buffers, solid earnings, and improving asset quality.
* **Insurance Sector**
* **Impact:** The insurance sector continues to display balance sheet resilience.
* **Action Required:** Maintain a consolidated solvency ratio above the minimum threshold limit.
Key Entities Referenced
Financial Stability Report (FSR): Report released by the Reserve Bank reflecting the assessment of the Sub-Committee of the Financial Stability and Development Council on the resilience of the Indian financial system.
Financial Stability and Development Council (FSDC): Council whose Sub-Committee's assessment is reflected in the Financial Stability Report.
Reserve Bank: The releasing authority of the Financial Stability Report (FSR).
Mumbai: Location of the Department of Communication, Central Office, of the Reserve Bank of India.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
December 31, 2025
RBI releases the Financial Stability Report, December 2025
Today, the Reserve Bank released the December 2025 edition of the Financial Stability
Report (FSR), which 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:
• Global economy has been resilient, supported by fiscal measures, front-loaded
trade, and strong AI-related investment. However, downside risks persist due to still
elevated uncertainty, high public debt, and the risk of a disorderly market correction.
• Global financial markets appear strong on the surface but show growing underlying
vulnerabilities. Sharp rise in equities and other risk assets, the expanding role of
non-bank financial intermediaries and their deepening interconnectedness with
banks, and the growth of stablecoins all heighten global financial system fragilities.
• Despite an uncertain and challenging global economic backdrop, the Indian
economy continues to grow strongly, underpinned by robust domestic demand,
benign inflation, and prudent macroeconomic policies.
• The domestic financial system remains robust and resilient, bolstered by strong
balance sheets, easy financial conditions, and low financial market volatility.
Nonetheless, there are near-term risks from external uncertainties - geopolitical and
trade related.
• The health of the scheduled commercial banks (SCBs) remains sound with strong
capital and liquidity buffers, improved asset quality and robust profitability.
• Macro stress test results affirm the resilience of SCBs to withstand losses under
hypothetical adverse scenarios and maintain capital buffers well above the
regulatory minimum. Stress tests also confirm the resilience of mutual funds and
clearing corporations.
• Non-banking financial companies (NBFCs) remain robust supported by strong capital
buffers, solid earnings, and improving asset quality.
• The insurance sector continues to display balance sheet resilience and the
consolidated solvency ratio remained above the minimum threshold limit.
(Brij Raj)
Press Release: 2025-2026/1807 Chief General Manager