India’s economy continues to demonstrate solid growth momentum, driven by strong domestic consumption, controlled inflation levels, and disciplined macroeconomic policymaking, according to the Reserve Bank of India’s latest Financial Stability Report. The central bank highlighted that the overall financial ecosystem remains resilient, supported by healthy institutional balance sheets, supportive financial conditions, and subdued market volatility.

The report noted that scheduled commercial banks are in a robust position, with comfortable capital adequacy and liquidity levels, improving asset quality, and sustained profitability. Similarly, non-banking financial companies (NBFCs) are maintaining financial stability, aided by consistent earnings growth and stronger asset portfolios. The insurance sector also remains on firm footing, with solvency ratios well above regulatory requirements, reinforcing confidence in the sector’s long-term stability.

Beyond domestic factors, the RBI observed that the global economy has also shown notable resilience, supported by government-led fiscal measures and rapid technological advancements, particularly in areas such as artificial intelligence, which are contributing to productivity and efficiency gains worldwide.

The report highlighted a rise in household debt in India to 41.3 percent of GDP as of March 2025, largely attributed to increased consumption-led borrowing. Despite this increase, India continues to record one of the lowest levels of household indebtedness among comparable lower-middle-income economies, indicating that overall leverage remains manageable.

The RBI reaffirmed that its calibrated policy approach is focused on sustaining economic growth while preserving financial and macroeconomic stability. The findings of the Financial Stability Report reinforce confidence in the strength and resilience of India’s financial system amid evolving domestic and global conditions.

Summary

The RBI’s Financial Stability Report underscores the continued strength of the Indian economy, supported by robust domestic demand, a stable financial system, and prudent policymaking. While household debt has risen due to higher consumption, it remains low compared to peer economies. Overall, the report affirms that India’s financial sector is resilient and well-positioned to support sustainable economic growth.

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