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Informist, Tuesday, Jun. 30, 2026

 

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--RBI Malhotra: Near-term outlook uncertain amid evolving global environment 
--RBI Malhotra: Global financial stability risks remain elevated 
--CONTEXT: RBI Governor Malhotra's comments from Financial Stability Report 
--RBI Malhotra: Global central banks may maintain hawkish policy stance 
--RBI Malhotra: Indian economy resilient despite facing external shocks 
--RBI Malhotra: Strong growth, low CPI preserve macro-financial stability 
--RBI Malhotra: Remain alert to evolving external, domestic risks 
--RBI Malhotra:Committed to strengthen guardrails to protect econ from shock 
--RBI Malhotra: Fincl Stability Report reaffirms India fincl system strength 
--RBI Malhotra: Stress tests indicate fincl institutions well-positioned 
--RBI Malhotra: Fincl system remains key strength, support for real economy 
--RBI Malhotra: Aim for efficient, inclusive, dynamic fincl system 
--RBI Malhotra: Aim for system to support business, households 

 

NEW DELHI – The Indian economy and financial system remain resilient despite significant external shocks. Strong growth, low inflation, healthy balance sheets across financial and non-financial firms, and ample buffers have helped to maintain macro-financial stability, Reserve Bank of India Governor Sanjay Malhotra said in the bi-annual Financial Stability Report released Tuesday. Even so, the RBI will remain watchful of evolving external and domestic risks and is committed to strengthening safeguards that protect the Indian economy and financial system from potential shocks, he said.

 

Banks and non-banking financial institutions remain sound, backed by strong capital and liquidity, healthy profitability, low non-performing assets, and robust credit growth. "Stress tests indicate that the financial institutions are well-positioned to withstand adverse shocks," Malhotra said. "Financial markets, notwithstanding the volatility posed by global uncertainties, have been functioning in an orderly manner. Taken together, the financial system remains a key source of strength and support for the real economy and India's growth momentum."

 

However, the RBI governor said the near-term outlook remains uncertain amidst the rapidly evolving global environment. "The global financial stability risks remain elevated," Malhotra said. "Inflationary pressures may require major advanced economy central banks to maintain a hawkish policy stance, potentially tightening global financial conditions."

 

At the same time, vulnerabilities tied to high public debt, bond-market fragility, stretched asset valuations, and the growing footprint of leveraged non-bank financial intermediaries could amplify the impact of future shocks, he said.

 

The central bank acknowledged that the risk of adverse external shocks has risen, with geopolitical conflicts and fragmentation emerging as key challenges for policymakers. In this environment, preserving financial stability, strengthening the financial system, and building systemic resilience have become more important than ever, Malhotra said. 

 

"We (RBI) recognise that maintaining public confidence in the financial system requires more than prudential soundness," the governor said. "Policies that promote fair conduct and improve customer experience are equally important. Our objective, therefore, remains unchanged: we want to foster a financial system that is not only resilient and stable, but also efficient, inclusive, and dynamic--a system which supports businesses and households to participate and grow in a well-functioning economy."  End

 

Reported by Vaishali Tyagi

Edited by Rajeev Pai

 

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