**Executive Summary**
The Reserve Bank of India released the December 2025 edition of the Financial Stability Report (FSR) on December 31, 2025. The FSR 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.
**Key Points / Main Content**
* **Global Economy and Markets**
* Global economy: Resilient but faces downside risks (elevated uncertainty, high public debt, disorderly market correction).
* Global financial markets: Appear strong but show vulnerabilities (rise in equities/risk assets, role of non-bank financial intermediaries, interconnectedness with banks, stablecoins).
* **Indian Economy**
* Continues to grow strongly due to robust domestic demand, benign inflation, and prudent macroeconomic policies.
* **Domestic Financial System**
* Remains robust and resilient (strong balance sheets, easy financial conditions, low volatility).
* Faces near-term risks from external uncertainties (geopolitical, trade-related).
* **Scheduled Commercial Banks (SCBs)**
* Health remains sound (strong capital/liquidity buffers, improved asset quality, robust profitability).
* Macro stress tests: SCBs can withstand losses and maintain capital above regulatory minimum.
* Stress tests also confirm the resilience of mutual funds and clearing corporations.
* **Non-Banking Financial Companies (NBFCs)**
* Remain robust (strong capital buffers, solid earnings, improving asset quality).
* **Insurance Sector**
* Continues to display balance sheet resilience and the consolidated solvency ratio remained above the minimum threshold limit.
**Impact Analysis**
**Scheduled Commercial Banks (SCBs)**
* **Impact**
* Need to maintain strong capital and liquidity buffers.
* Subject to macro stress tests to ensure resilience.
* **Action Required**
* Continue adhering to regulatory requirements for capital adequacy.
**Non-Banking Financial Companies (NBFCs)**
* **Impact**
* Need to maintain strong capital buffers and solid earnings.
* **Action Required**
* Maintain robust financial health and asset quality.
**Insurance Sector**
* **Impact**
* Needs to maintain balance sheet resilience.
* **Action Required**
* Ensure the consolidated solvency ratio remains above the minimum threshold limit.
**General Public and Investors**
* **Impact**
* Provides insights into the stability of the Indian financial system.
* **Action Required**
* Monitor the financial landscape and make informed decisions based on the report's assessment.
Key Entities Referenced
Financial Stability Report (FSR): December 2025 edition reflecting collective assessment on the resilience of the Indian financial system and risks to financial stability.
Financial Stability and Development Council (FSDC): FSDC is the parent body whose Sub-Committee's assessment is reflected in the Financial Stability Report.
Mumbai: Location of the Department of Communication, Reserve Bank of India.
Reserve Bank: The releasing authority of the Financial Stability Report.
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