New Delhi: The Reserve Bank of India (RBI) on Thursday released the 23rd issue of the Financial Stability Report (FSR), which reflects the collective assessment of the Financial Stability and Development Council’s (FSDC) sub-committee on risks to financial stability. Resilience of the financial system in the context of contemporary issues relating to the development and regulation of the financial sector.
Here are the main attractions:
• Sustainable policy support, sound financial conditions and the pace of vaccination are fueling an uneven global recovery.
• Policy support has helped ease the financial position of banks, including non-performing loans, and maintain solvency and liquidity globally.
• On the domestic front, the pace of the second wave of COVID-19 has impacted economic activity, but monetary, regulatory and fiscal policy measures have helped reduce solvency risks of financial institutions, stabilize markets and maintain financial stability. have helped.
• Capital to Risk Weighted Asset Ratio (CRAR) of Scheduled Commercial Banks (SCBs) increased to 16.03%, and Provision Coverage Ratio (PCR) stood at 68.86% in March 2021.
• The macro stress test indicates that the gross non-performing asset (GNPA) ratio of SCBs may increase from 7.48% in March 2021 to 9.80% by March 2022; and up to 11.22% under a severe stress scenario, although SCBs have substantial capital, both at the aggregate and individual level, even under stress.
• Going forward, as banks respond to credit demand in a recovering economy, they will need to bolster their capital and liquidity positions to brace themselves against potential balance sheet stress.
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