**Executive Summary**
The Reserve Bank of India (RBI) has released the December 2025 edition of the Financial Stability Report (FSR). This report presents an assessment of the Indian financial system's resilience and risks to financial stability. The release date is December 31, 2025.
**Key Points / Main Content**
**Global Economic Outlook**
* The global economy has shown resilience due to fiscal measures, front-loaded trade, and AI investments, but faces ongoing risks from uncertainty, high public debt, and potential market corrections.
* Global financial markets exhibit underlying vulnerabilities despite apparent strength, exacerbated by rising risk assets, increased activity of non-bank financial intermediaries, and the growth of stablecoins.
**Indian Economic and Financial System Performance**
* The Indian economy continues to grow robustly, driven by domestic demand, low inflation, and prudent macroeconomic policies, despite a challenging global backdrop.
* The domestic financial system is robust and resilient, supported by strong balance sheets, favorable financial conditions, and low market volatility, though near-term risks exist from external geopolitical and trade uncertainties.
**Sectoral Resilience**
* Scheduled Commercial Banks (SCBs) demonstrate sound health with strong capital and liquidity buffers, improved asset quality, and robust profitability.
* Macro stress tests indicate SCBs can withstand adverse scenarios and maintain capital buffers above regulatory minimums.
* Mutual funds and clearing corporations also confirmed resilience through stress tests.
* Non-Banking Financial Companies (NBFCs) are robust, supported by strong capital buffers, solid earnings, and improving asset quality.
* The insurance sector exhibits balance sheet resilience, with its consolidated solvency ratio remaining above the minimum threshold.
**Impact Analysis**
**Scheduled Commercial Banks (SCBs)**
* **Impact**: The report highlights the sound health and resilience of SCBs, confirming their ability to withstand hypothetical adverse scenarios.
* **Action Required**: No specific action is mentioned as required by SCBs; the report serves as an assessment.
**Non-Banking Financial Companies (NBFCs)**
* **Impact**: NBFCs are identified as robust, supported by strong capital, earnings, and asset quality.
* **Action Required**: No specific action is mentioned as required by NBFCs; the report serves as an assessment.
**Insurance Sector**
* **Impact**: The insurance sector demonstrates balance sheet resilience and maintained solvency ratios above the minimum threshold.
* **Action Required**: No specific action is mentioned as required by the insurance sector; the report serves as an assessment.
**Mutual Funds and Clearing Corporations**
* **Impact**: Stress tests confirm their resilience.
* **Action Required**: No specific action is mentioned as required by mutual funds and clearing corporations; the report serves as an assessment.
Key Entities Referenced
Reserve Bank of India: The central bank that released the report.
Financial Stability Report (FSR): The primary document being discussed, released by the Reserve Bank of India.
Sub-Committee of the Financial Stability and Development Council (FSDC): The body whose collective assessment is reflected in the FSR.
Scheduled Commercial Banks (SCBs): A key sector of the Indian financial system whose health is analyzed.
Non-banking financial companies (NBFCs): Another key sector of the Indian financial system whose robustness is assessed.
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