New Delhi: The Reserve Bank of India (RBI) on Tuesday released the Financial Stability Report for June 2026, stating that the Indian financial system remains resilient despite persistent global uncertainties.
The report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council on the resilience of India’s financial system and the risks to financial stability.
The report noted that the global financial system has shown notable resilience despite repeated shocks. Financial markets remained orderly after an initial phase of volatility triggered by the outbreak of the West Asia conflict.
However, global financial stability risks continue to remain elevated.
According to an RBI press release, persistent supply chain uncertainties could tighten global financial conditions and rekindle inflationary pressures. The report also highlighted elevated public debt, bond market fragilities, stretched asset valuations, and leveraged non-banking financial institutions as major vulnerabilities that could amplify future shocks.
The RBI further said India’s strong macroeconomic fundamentals have placed the country in a better position than many of its peers. These fundamentals have also improved India’s ability to withstand external shocks compared to previous crisis episodes.
The report added that the balance of risks has turned favourable, supported by the interim peace deal and recent policy measures taken by the government and the Reserve Bank to strengthen capital inflows.
The domestic financial system continues to remain resilient, backed by strong balance sheets of banks and non-bank financial institutions. Scheduled Commercial Banks remain safe and sound, supported by robust capital and liquidity buffers, improved asset quality and stable profitability.
The RBI’s macro stress test results showed that the banking system is well-positioned to absorb potential shocks. Aggregate capital ratios are projected to remain comfortably above regulatory requirements even under hypothetical adverse scenarios.
The report also said non-banking financial companies remain financially sound, supported by strong capitalisation, healthy profitability and improving asset quality.
The insurance sector has also continued to demonstrate balance sheet resilience, with the solvency ratio of life insurers remaining above the prescribed minimum threshold.
