The Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said that India is one of the fastest-growing major economies in the world with a rising potential growth profile. He further said that the Indian economy, domestic financial system remain resilient on strong macroeconomic fundamentals.
The RBI and other financial regulators remain invested in fostering a financial system that is resilient to shocks. The central bank is further committed to act early and decisively to prevent any build-up of risks to the Indian economy, Shaktikanta Das informed.
He further said that Banks' gross non-performing assets ratio has declined to multi-year low of 3.2 per cent and net NPA ratio to 0.8 per cent as on September 2023.
Resilience of NBFC sector has improved, Gross Non-Performing Assets ratio at 4.6 per cent and return on assets at 2.9 per cent at end of September, they said.
The RBI said that bolstered by strong capital buffers and robust earnings, financial institutions are supporting durable credit growth.
“At the same time, higher profits and lower leverage are contributing to sound corporate financials,” the report said.
“Proactive and prudent policy actions and availability of policy buffers are steering the economy on a rising growth trajectory with stability,” the report said.
Highlighting the strength of the banking sector, the report states that the capital to risk-weighted assets ratio (CRAR) and the common equity tier 1 (CET1) ratio of scheduled commercial banks (SCBs) stood at healthy 16.8 per cent and 13.7 per cent, respectively, in September 2023.
The report said that the macro stress tests for credit risk reveal that the country’s banks would be able to comply with minimum capital requirements, with the system-level CRAR in September 2024 projected at 14.8 per cent, 13.5 per cent and 12.2 per cent, respectively, under baseline, medium and severe stress scenarios.
With inputs from PTI, IANS
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