**Executive Summary**
The Reserve Bank of India (RBI) released the June 2025 issue of the 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 risks to financial stability.
**Key Points / Main Content**
* **Global Economy and Financial System:**
* 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 and elevated asset valuations amplifying shocks.
* **Indian Economy:**
* Despite a challenging global backdrop, the Indian economy remains a key driver of global growth, supported by sound macroeconomic fundamentals and prudent policies.
* **Domestic Financial System:**
* The domestic financial system shows resilience due to healthy balance sheets of banks and non-banks.
* Financial conditions have eased with supportive monetary policy and low volatility.
* Corporate balance sheets support macroeconomic stability.
* **Scheduled Commercial Banks (SCBs):**
* SCBs show soundness and resilience due to robust capital buffers, low non-performing loans, and strong earnings.
* Macro stress tests confirm adequate capital buffers in most SCBs, even under adverse scenarios, with resilience also validated in mutual funds and clearing corporations.
* **Non-Banking Financial Companies (NBFCs) and Insurance Sector:**
* NBFCs remain healthy with sizable capital buffers, robust earnings, and improving asset quality.
* The insurance sector's consolidated solvency ratio remains above the minimum threshold.
**Impact Analysis**
**Stakeholder: Reserve Bank of India (RBI)**
*Impact:* Assesses and monitors the stability of the Indian financial system and uses findings to inform policy decisions.
*Action Required:* Continue monitoring financial stability indicators and implementing appropriate regulatory measures.
**Stakeholder: Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs) and Insurance Companies**
*Impact:* Understand how macroeconomic conditions, risks, and regulatory requirements influence capital adequacy, asset quality and overall solvency.
*Action Required:* Maintain sufficient capital buffers, manage asset quality, and adhere to regulatory requirements to ensure financial stability.
**Stakeholder: Financial Stability and Development Council (FSDC)**
*Impact:* The FSDC has a collective assessment of risks to financial stability.
*Action Required:* Use the report to assess the Indian financial system and propose any necessary policy adjustments.
Key Entities Referenced
Financial Stability Report (FSR): A report released by the Reserve Bank of India reflecting the collective assessment 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): An Indian council assessing the resilience of the Indian financial system.
Reserve Bank of India: The central bank of India.
Mumbai: Location of the Central Office of the Reserve Bank of India.
Non-banking financial companies (NBFCs): Mentioned in highlights, remain healthy with sizable capital buffers, robust earnings and improving asset quality.
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