RBI FSR
Financial sector strong but RBI watchful of emerging risks, says RBI Governor Das
RBI's financial stability report underscores the importance of governance, Basel III norms compliance, and maintaining high CET1 ratios for banks. Monitoring GNPA ratios of public, private, and foreign banks essential for financial system stability and resilience.
Why RBI's disproportionate action against fintechs may be bad for business and investor sentiment?
In a situation where financial liabilities of citizens have grown from 3.8% to 5.8% of GDP between 2021 and 2023, is it not reasonable to expect that regulatory and supervisory actions are taken in a 'calibrated' fashion, keeping an eye on customers credit needs and financial convenience? In an age when gov and corporations promote light-touch digital solutions as a universal panacea, should regulatory boundaries remain static and stifle new lending models?
Union Budget 2024: What is in store for Indian banks?
Finance Minister Nirmala Sitharaman is set to announce measures in the Union Budget 2024 on February 1. The health of public banks, highlighted as relatively healthy by the Reserve Bank of India, will be closely monitored by executives and shareholders. With 2024 being an election year, a vote on account is expected in February, and the full budget presentation will follow after the General Elections.
RBI to act early to prevent any risk to India's fastest growth potential: Guv Shaktikanta Das
The FSR 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 Indian financial system.
RBI flags contagion risk, says stress in NBFC sector assessed to be higher than in March 2023
The Reserve Bank of India (RBI) stated in its Financial Stability Report that while macro stress tests show banks would comply with minimum capital requirements under severe stress scenarios, the non-banking financial company (NBFC) sector faces higher stress relative to March 2023. The RBI emphasized proceeding with caution on the evolving outlook and risks.
Bad assets of banks decline multi-year low to 0.8% in September: RBI report
The report 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 Indian financial system.
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'Foreign banks' exposure to trades in long-term bonds not a concern'
The Reserve Bank of India (RBI) has been regularly reviewing the burgeoning bond-derivative trades between banks and insurance companies, and does not see any major reasons for concern at the current juncture.
Share of housing loans in total advances rises to 14.2 pc in 11 years: RBI report
Executive chairman of Andromeda Sales V Swaminathan said the residential housing segment has experienced notable growth in demand, thanks to factors such as the implementation of RERA (Real Estate Regulation and Development Act), and the impact of the pandemic. Consequently, the share of home loans in the overall retail loan portfolio has increased.
Share of housing loans in total advances rises to 14.2 pc in 11 years: RBI report
The share of residential housing loans in total advances has increased over the last eleven years to 14.2 per cent in March 2023 from 8.6 per cent in March 2012, as per the Reserve Bank's latest Financial Stability Report (FSR). The share of residential housing loans in total loans has increased over the last eleven years to 14.2 per cent in March 2023 from 8.6 per cent in March 2012, the report said.
Liquidity risk bigger for NBFCs than asset quality, capital: RBI FSR
Under a baseline scenario projected for one year ahead, based on assumptions of business continuing under usual conditions the gross non performing asset (GNPA) ratio is assessed at 4.1% up from 3.4% in March 2023 with capital adequacy ratio (CAR) at 24.4% down slightly from 25% in March 2023.
India's economic prospects brighten; core inflation, global volatility may pose risks: RBI financial stability report
"The Indian economy presents a picture of resilience, supported by strong macroeconomic fundamentals. Sustained growth momentum, moderating inflation and anchoring of inflation expectations, a narrowing current account deficit and rising foreign exchange reserves, ongoing fiscal consolidation and a robust financial system are setting the economy on a path of sustained growth," RBI said.
Indian economy makes solid recovery despite global headwind: RBI Governor Shaktikanta Das
In this fragile global milieu, Das said, balancing the policy trade-offs, preserving macroeconomic and financial stability, shoring up confidence and supporting sustainable growth are top priorities for policymakers the world over.
Indian lenders strong enough to counter worst of macro stress: RBI
It may go down to 14.0% in the medium stress scenario and to 13.1% under the severe stress scenario by September 2023, but it will stay above the minimum capital requirement. None of the 46 banks would breach the regulatory minimum capital requirement of 9% in the next one year, even in a severely stressed situation, RBI tests show.
Indian economy presents a picture of resilience amid global shocks: RBI Governor
Going forward, Das said that core issues of management of climate change, dealing with unanticipated and fresh shocks, if any, further strengthening the buffers of financial system, harnessing fintech innovations and deepening financial inclusion will continue to receive priority attention from regulators and policy makers. In 2023, India is well positioned to play a leading role in the world stage as part of its G20 presidency. The biggest challenge for G20 as a group is to re-ignite the efficacy of multilateralism, the Governor said.
Banks and NBFCs in position to withstand the worst macro economic stress: RBI
The central bank’s stress test on the banking system indicates that in a baseline scenario the gross non-performing assets in the banking system will improve to 4.9% by September 2023. The total bad loan ratio of the banking system is steadily trending down to a seven-year low of 5.0% in September 2022, while net non-performing assets have dropped to ten-year low of 1.3% of total assets.
Fintechs should operate under the licenses granted: RBI Governor Das
The central bank has been highlighting the risks posed to the financial system due to fintech and big tech firms. In its recently released Financial Stability Report (FSR) the RBI had called for the need to shield the financial system from the fintech industry’s potential to cause instability.
Govt watchful and mindful of impact of declining rupee on imports: FM
"The Reserve Bank of India is very keenly watching the exchange rate. We are not alone in this world. We are also open as an economy... the rupee against the dollar and other currencies versus the dollar, the rupee has performed relatively better," she said.
Dollar shortage may hit companies with overseas currency borrowings
Reflecting the increase in risk aversion and impact of monetary tightening, corporate bond spreads in the US and in emerging markets have widened despite some moderation in June 2022, as valuations increasingly reflect a weak economic outlook, RBI FSR report said.
RBI: Financial system must be guarded against fintech risks
The banking regulator once again cautioned against the proliferation of virtual currencies, calling the instruments a 'danger'. "Cryptocurrencies are a clear danger," RBI governor Shaktikanta Das noted in the foreword to the report. "Anything that derives value based on make believe, without any underlying, is just speculation under a sophisticated name."
Loans rise across sectors, total loans up 12.7 percent in May
Significantly all sectors- agriculture, industry, services as well as retail did better than last year, the latest data on sectoral deployment of bank credit released by the Reserve Bank of India indicate.
Some UCBs fail in stress tests even in baseline: RBI's FSR
Stress tests were conducted on a select set of UCBs to assess credit risk (default risk and concentration risk), market risk (interest rate risk in trading book and banking book) and liquidity risk, based on their reported financial positions as of March 2022.
Signs of stress in short-term dollar funding: RBI report
“With the announcement of sanctions, the Forward Rate Agreement – Overnight Indexed Swap spread – a measure of how expensive or cheap it will be for banks to borrow in the interbank market relative to the risk-free rate – has widened, along with spreads on nonfinancial commercial paper,” said the Reserve Bank of India (RBI) report.
Private sector banks aggressively lend to MSMEs, according to RBI's latest FSR
The number of fresh borrowers at 67.61 lakhs for private sector banks under the government's ECLGS scheme is three times the fresh borrowers attracted by public sector banks who managed only 22.65 lakh new borrowers. Private banks disbursed Rs 95700 crore compared to Rs 79800 crore disbursed by public sector banks, according to Reserve Bank's latest Financial Stabilty Report.
Emerging signs of stress in MSME sector, bad loans on the rise: RBI
The FSR report added that the MSME portfolio of both PSU and private banks indicate accumulation in NPA and SMA-2 categories in September 2021.
Banks' gross NPAs may rise to 9.5% in September 2022: RBI report
"Macro stress tests for credit risk indicate that the gross non-performing asset (GNPA) ratio of SCBs may increase from 6.9 per cent in September 2021 to 8.1 per cent by September 2022 under the baseline scenario and to 9.5 per cent under a severe stress scenario," according to the 24th issue of the Financial Stability Report (FSR) released by the RBI.
Second wave dented recovery, but eco activity up now: RBI
The second wave of the pandemic has dented recovery, but with Covid cases abating rapidly, economic activity has improved since May-end, RBI Governor Shaktikanta Das has said.
Banks better placed to handle shocks than six months ago: RBI
In its bi annual FSR, RBI said banking sector NPAs can increase to a maximum of 11.22% in the worst case down from 14.8% predicted in the worst case scenario in the last report in January. Gross NPAs will also be lower in the baseline scenario at 9.80% versus the 13.5% predicted in January.
Banks’ capital buffer resilient to face future shocks: Shaktikanta Das
The RBI Financial Stability Report showed a more benign increase in bad loans at scheduled commercial banks in the country.
Banks gross NPA may rise to 13.5 pc by Sep 2021: RBI FSR
If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8 per cent, the report said.
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