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Banks well-positioned to withstand even severe stress scenarios: RBI Governor Shaktikanta Das
RBI governor Shaktikanta Das said in his foreword to a newly launched report said that the stress test results presented in this FSR ( Financial Stability Report) demonstrate that banks are well-positioned to withstand even severe stress scenarios.
Highlights
- The report noted that Indian banks and non-banking institutions have sufficient capital buffers.
- RBI said banks gross non-performing assets ratio fell to a six-year low of 5.9% in March 2022.
New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das said in his foreword to a newly launched report said that the stress test results presented in this FSR ( Financial Stability Report) demonstrate that banks are well-positioned to withstand even severe stress scenarios without falling below the minimum capital requirement.
The report noted that Indian banks and non-banking institutions have sufficient capital buffers to withstand shocks and would be able to comply with minimum capital requirements even under extreme stress scenarios. (ALSO READ: MSMEs form one-third of India's economy, Budget raised 650% in 8 years: PM)
RBI said banks gross non-performing assets ratio fell to a six-year low of 5.9% in March 2022. "The financial system is well-capitalised and returning to profitability," Das added in his address. (ALSO READ: Shark Tank fame Peyush Bansal-led Lenskart acquires Japanese firm Owndays)
“A noteworthy feature of current situation is overall resilience of Indian financial institutions, which should stand economy in good stead as it strengthens its prospects. This reflects a combination of good governance and risk management practices,” he added.
Das said that “even so, we must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name.”
He added that while technology has supported reach of financial sector and its benefits must be fully harnessed, its potential to disrupt financial stability has to be guarded against. “As financial system gets increasingly digitalised, cyber risks are growing and need special attention,” he said.