In the Financial Stability Report, the RBI has asked banks to strengthen capital position, improve governance and be cautious about the impact of global uncertainty in the current favorable market conditions.
The Reserve Bank of India (RBI) on Thursday released the 23rd issue of the Financial Stability Report (FSR), which focuses on the risks of financial stability and the resilience of the monetary framework with regards to contemporary issues identified with the turn of events and guideline of the monetary area. (FSDC), sub-committees collective evaluation. Simultaneously, the Reserve Bank of India (RBI) has requested that banks keep a watch on the credits given to retail and little organizations
In the half-yearly Financial Stability Report, RBI has requested that banks fortify capital position, further develop administration and be mindful about the effect of worldwide vulnerability in the current great economic situations. The report said that banks need to be especially vigilant about credit demand from productive and viable sectors, while avoiding adverse selection bias.
Highlights of the report-
Reasonable approach support, considerate monetary conditions and the speed of inoculation are filling a lopsided worldwide recuperation.
Policy support has helped maintain the financial position and solvency and liquidity of non-performing banks globally.
On the local front, the speed of the second convergence of COVID-19 has influenced monetary development, notwithstanding cash related, authoritative and financial methodology measures have lessened dissolvability risks of money related foundations,stabilize markets and maintain financial stability. has helped.
The risk-weighted assets to capital ratio (CRAR) of scheduled commercial banks (SCBs) increased to 16.03 percent and the provisioning coverage ratio (PCR) to 68.86 percent in March 2021.
- The Macro Stress Test indicates that the Gross Non-Performing Asset (GNPA) ratio of SCBs under baseline scenario may increase from 7.48 percent in March 2021 to 9.80 percent. Scheduled commercial banks have substantial capital even under stress, both at the aggregate and individual levels.
- In the times to come, as banks respond to credit demand in a recovering economy, they will need to strengthen their capital and liquidity position to brace themselves against potential balance sheet pressures.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.