Quick Summary
Today, the Reserve Bank released the 22nd issue of theFinancial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, and the resilience of the financial system in the context of contemporaneous issues relating to development and regulation of the financial sector. The release of FSR was rescheduled to incorporate the first advance estimates of national income for 2020-21 th
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FAQ :
The Financial Stability Report (FSR) is a report released by the Reserve Bank of India that reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of the financial system.
The release was rescheduled to incorporate the first advance estimates of national income for 2020-21, which were released by the National Statistical Office on January 7, 2021.
In the initial phase, policy actions focused on restoring normal functioning and mitigating stress. The current focus is on supporting recovery and preserving the solvency of businesses and households.
Performance parameters of banks have improved significantly, aided by regulatory measures. The capital to risk-weighted assets ratio (CRAR) improved to 15.8% in September 2020, while the gross non-performing asset (GNPA) ratio declined to 7.5%.
Macro stress tests suggest that the GNPA ratio of all Scheduled Commercial Banks (SCBs) may increase from 7.5% in September 2020 to 13.5% by September 2021 under a baseline scenario, and potentially to 14.8% under a severe stress scenario.
No, contagion risk to the banking system under various scenarios has declined compared to March 2020, due to factors like better capitalisation of banks and a shrinking inter-bank market.
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