Improving financial stability

Some areas of concern remain

The Reserve Bank of India’s (RBI’s) Financial Stability Report, or FSR, released last week, suggests the state of the financial system in India is broadly strong and stable. Several indicators of broader financial risk in the economy have declined, and the system appears prepared to deliver the resources required for growth. The gross ratio of non-performing assets in the banking system is at a multi-year low, at 2.8 per cent, and the FSR expects it might continue to decrease. However, there are still certain sources of future risk that require careful monitoring by the regulator.

One of these