**Executive Summary**
This press release, dated June 30, 2025, announces the release of the Reserve Bank of India's (RBI) June 2025 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 related risks. The FSR highlights key factors influencing financial stability.
**Key Points / Main Content**
* **Global and Financial System Resilience:**
* Elevated economic and trade policy uncertainties are testing the resilience of the global economy and financial system.
* Financial markets remain volatile due to shifting policies and geopolitical environment, with vulnerabilities like high public debt and elevated asset valuations.
* **Indian Economy and Financial System:**
* The Indian economy remains a key driver of global growth, supported by strong macroeconomic fundamentals and prudent policies.
* The domestic financial system shows resilience due to healthy balance sheets of banks and non-banks, eased financial conditions, and strong corporate balance sheets.
* **Banking and Financial Institutions:**
* Scheduled commercial banks (SCBs) are sound and resilient, supported by robust capital buffers, low non-performing loans ratio, and strong earnings.
* Macro stress tests indicate that most SCBs have adequate capital buffers, even under adverse conditions; mutual funds and clearing corporations also demonstrate resilience.
* Non-banking financial companies (NBFCs) remain healthy with good capital buffers, robust earnings, and improving asset quality.
* The consolidated solvency ratio of the insurance sector remains above the minimum threshold limit.
**Impact Analysis**
**Stakeholder: Global Economy and Financial System**
**Impact:** Exposed to risks from economic and trade policy uncertainties, leading to volatility in financial markets.
**Action Required:** Monitor and adapt to evolving global economic conditions and policy changes.
**Stakeholder: Reserve Bank of India (RBI)**
**Impact:** Responsible for assessing and maintaining the stability of the Indian financial system.
**Action Required:** Use the FSR findings to inform policy decisions and regulatory actions to mitigate risks.
**Stakeholder: Indian Financial Institutions (Banks, NBFCs, Insurance Companies)**
**Impact:** Required to maintain resilience and soundness to withstand potential shocks and contribute to overall financial stability.
**Action Required:** Maintain adequate capital buffers, manage asset quality, and comply with regulatory requirements.
**Stakeholder: Indian Economy**
**Impact:** Relies on a stable and resilient financial system for sustainable growth and development.
**Action Required:** Support policies that promote financial stability and address vulnerabilities in the financial system.
Key Entities Referenced
Financial Stability Report (FSR): A report released by the Reserve Bank reflecting the collective assessment of the Sub-Committee of the Financial Stability and Development Council on the resilience of the Indian financial system and risks to financial stability.
Financial Stability and Development Council (FSDC): A council whose Sub-Committee provides the collective assessment reflected in the Financial Stability Report.
Reserve Bank of India: The central bank that released the Financial Stability Report.
Mumbai: Location of the Department of Communication, Central Office of the Reserve Bank of India.
Scheduled Commercial Banks (SCBs): Mentioned in the context of macro stress tests.
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
June 30, 2025
RBI releases the Financial Stability Report, June 2025
Today, the Reserve Bank released the June 2025 issue 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:
Elevated economic and trade policy uncertainties are testing the resilience of
the global economy and the financial system.
Financial markets remain volatile, especially core government bond markets,
driven by shifting policy and geopolitical environment. Alongside, existing
vulnerabilities such as soaring public debt levels and elevated asset valuations
have the potential to amplify fresh shocks.
Despite an uncertain and challenging global economic backdrop, the Indian
economy remains a key driver of global growth, underpinned by sound
macroeconomic fundamentals and prudent macroeconomic policies.
The domestic financial system is exhibiting resilience fortified by healthy
balance sheets of banks and non-banks. Financial conditions have eased
supported by accommodative monetary policy and low volatility in financial
markets. The strength of the corporate balance sheets also lends support to
overall macroeconomic stability.
The soundness and resilience of scheduled commercial banks (SCBs) are
bolstered by robust capital buffers, multi-decadal low non-performing loans
ratio and strong earnings.
Results of macro stress tests affirm that most SCBs have adequate capital
buffers relative to the regulatory minimum even under adverse stress
scenarios. Stress tests also validate the resilience of mutual funds and
clearing corporations.
Non-banking financial companies (NBFCs) remain healthy with sizable capital
buffers, robust earnings and improving asset quality.
The consolidated solvency ratio of the insurance sector also remains above
the minimum threshold limit.
(Puneet Pancholy)
Press Release: 2025-2026/624 Chief General Manager