The Reserve Bank of India has commented positively on the country's economy. RBI has said that the Indian economy and the domestic financial system remain resilient on the strength of strong macroeconomic fundamentals. RBI Governor Shaktikanta Das said India is one of the fastest growing major economies in the world. There is still a possibility of growth in the Indian economy. The central bank said in a report on Thursday that the ratio of net non-performing assets (NPAs) of banks declined to a multi-year low of 0.8 percent at the end of September 2023 and the country's domestic financial system remains resilient.
“The resilience of the non-banking financial companies (NBFC) sector has improved in September 2023,” the RBI said in its Financial Stability Report (FSR). Their CRAR has been 27.6 percent, GNPA ratio has been 4.6 percent and return on assets (ROA) has been 2.9 percent.
The gross non-performing assets (GNPA) ratio of banks also fell to a multi-year low of 3.2 percent, RBI said. This report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to the financial stability and resilience of the Indian financial system. The report further said that the capital-to-risk weighted assets ratio (CRAR) and common equity tier 1 (CET 1) ratio of scheduled commercial banks (SCBS) stood at 16.8 per cent and 13.7 percent respectively in September 2023.
According to the report, the macro stress test for credit risk shows that SCBs will be able to comply with the minimum capital requirements. The system-level CRAR in September 2024 is estimated to be 14.8 percent, 13.5 percent and 12.2 percent, respectively.
Referring to the current state of the Indian economy, the RBI report said that the domestic financial system remained strong due to strong macroeconomic fundamentals, improved balance sheets of financial institutions, moderation in inflation, improvement in external sector conditions and continued fiscal consolidation. happened. However, the report also says that the global economy faces many challenges. This has led to slow growth, large public debt, increasing economic fragmentation and the possibility of increased geopolitical conflicts.