**Executive Summary**
The Reserve Bank released the June 2025 issue of the Financial Stability Report (FSR) on June 30, 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 risks to financial stability.
**Key Points / Main Content**
**Global and Financial Market Conditions:**
* Elevated economic and trade policy uncertainties are testing the resilience of the global economy and the financial system.
* Financial markets remain volatile, driven by shifting policy and geopolitical environment, with vulnerabilities like soaring public debt levels and elevated asset valuations.
**Indian Economy and Financial System:**
* 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.
**Banking and Financial Institutions:**
* Scheduled commercial banks (SCBs) are sound and resilient due to robust capital buffers, low non-performing loans ratio and strong earnings.
* Macro stress tests affirm that most SCBs have adequate capital buffers relative to the regulatory minimum. 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.
**Impact Analysis**
**Scheduled Commercial Banks (SCBs)**
**Impact**
SCBs are highlighted as being resilient.
**Action Required**
SCBs must maintain adequate capital buffers relative to the regulatory minimum even under adverse stress scenarios.
**Non-Banking Financial Companies (NBFCs)**
**Impact**
NBFCs are highlighted as remaining healthy.
**Action Required**
NBFCs must maintain sizable capital buffers, robust earnings and improving asset quality.
**Insurance Sector**
**Impact**
The insurance sector is highlighted as remaining solvent.
**Action Required**
The insurance sector must maintain consolidated 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: Central bank of India responsible for releasing the Financial Stability Report.
Financial Stability and Development Council (FSDC): The council under which the Sub-Committee assesses the resilience of the Indian financial system.
Mumbai: Location of the Reserve Bank of India's Central Office.
Scheduled Commercial Banks (SCBs): Financial institutions whose soundness and resilience is discussed in the 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
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