The Indian economy remains a major driver of world growth, backed by robust macroeconomic fundamentals and sound policymaking, the Reserve Bank of India (RBI) declared on Monday, June 30, 2025, in its recent Financial Stability Report (FSR).
With continuous uncertainty in the overall global economy, the RBI reported that the Indian financial system continues to be stable and robust. The report pointed out that persistent volatility in international financial markets—particularly core government bond markets—has been influenced by evolving policy dynamics and increasing geopolitical tensions.
"Financial markets are still volatile, particularly core government bond markets, fueled by changing policy and geopolitical backdrop. In parallel, vulnerabilities such as record-high public debt levels and high asset valuations are likely to intensify new shocks," the RBI warned.
Nevertheless, India remains a beacon of stability. "The Indian economy remains a key driver of global growth, underpinned by sound macroeconomic fundamentals and prudent macroeconomic policies," the Central Bank reiterated.
The domestic financial system is reflecting robust resilience, supported by healthy balance sheets among banks and non-banking finance companies (NBFCs). Relaxed financial conditions—underpinned by easy monetary policy and relatively low market volatility—are also adding to macroeconomic resilience, the report finds.
Health in the corporate sector is another encouraging aspect, as robust balance sheets are underpinning overall economic stability.
For the banking industry, the report confirmed that the nation's scheduled commercial banks continue to stand firm. "The stability and resilience of the scheduled commercial banks are strengthened by healthy capital buffers, multi-decade long low non-performing loans ratio and sturdy earnings," the RBI stated.
These results from the macro stress testing also highlight this resilience. The FSR says that all SCBs possess adequate capital buffers above the minimum regulatory requirement, even in the severe stress conditions. Further, stress tests affirm the solidity and resilience of mutual funds and clearing corporations, highlighting the robustness of India's larger financial infrastructure.
