**Executive Summary**
The Reserve Bank of India (RBI) released the June 2025 Financial Stability Report (FSR) on June 30, 2025. 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 its risks.
**Key Points / Main Content**
* **Global and Financial Context:**
* Elevated economic and trade policy uncertainties are testing the resilience of the global economy and financial system.
* Financial markets remain volatile due to policy shifts and geopolitical factors.
* Soaring public debt and elevated asset valuations have the potential to amplify fresh shocks.
* **Indian Economy:**
* The Indian economy remains a key driver of global growth, underpinned by sound macroeconomic fundamentals and prudent policies.
* **Domestic Financial System:**
* The domestic financial system exhibits resilience due to healthy balance sheets of banks and non-banks.
* Financial conditions have eased, supported by monetary policy and low market volatility.
* The strength of corporate balance sheets supports overall macroeconomic stability.
* **Scheduled Commercial Banks (SCBs):**
* SCBs' soundness and resilience are bolstered by robust capital buffers, low non-performing loan ratios, and strong earnings.
* Stress tests show that most SCBs have adequate capital buffers, even under adverse scenarios.
* Stress tests also validate the resilience of mutual funds and clearing corporations.
* **Non-Banking Financial Companies (NBFCs):**
* NBFCs remain healthy with sizable capital buffers, robust earnings, and improved asset quality.
* **Insurance Sector:**
* The consolidated solvency ratio of the insurance sector remains above the minimum threshold limit.
**Impact Analysis**
**Stakeholder: Global Economy and Financial System**
* **Impact:** Subject to testing resilience due to economic and trade policy uncertainties, volatile financial markets and geopolitical factors.
* **Action Required:** Monitor and mitigate risks associated with elevated uncertainties, volatile markets, and geopolitical factors.
**Stakeholder: Indian Economy**
* **Impact:** Key driver of global growth, underpinned by sound macroeconomic fundamentals and prudent policies.
* **Action Required:** Maintain sound macroeconomic fundamentals and prudent policies to sustain growth.
**Stakeholder: Domestic Financial System**
* **Impact:** Exhibiting resilience due to healthy balance sheets of banks and non-banks.
* **Action Required:** Maintain healthy balance sheets and continue accommodative monetary policy.
**Stakeholder: Scheduled Commercial Banks (SCBs)**
* **Impact:** Soundness and resilience are bolstered by robust capital buffers.
* **Action Required:** Maintain robust capital buffers and address vulnerabilities identified in stress tests.
**Stakeholder: Non-Banking Financial Companies (NBFCs)**
* **Impact:** Remain healthy with sizable capital buffers.
* **Action Required:** Sustain healthy capital buffers and improve asset quality.
**Stakeholder: Insurance Sector**
* **Impact:** Consolidated solvency ratio remains above the minimum threshold limit.
* **Action Required:** Maintain solvency ratio above the minimum threshold limit.
Key Entities Referenced
Financial Stability Report (FSR): A report reflecting the collective assessment on the resilience of the Indian financial system and risks to financial stability.
Reserve Bank of India: The central bank of India, responsible for releasing the Financial Stability Report.
Financial Stability and Development Council (FSDC): An organization whose Sub-Committee contributes to the assessment in the Financial Stability Report.
Mumbai: The city where the Department of Communication, Central Office of Reserve Bank of India is located.
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