Khushboo Lucknow, 300 Questions 0 Answers 0 Best Answers 343 Points View Profile Khushboo Asked: November 6, 20212021-11-06T14:40:43+05:30 2021-11-06T14:40:43+05:30In: Economics Tell us about the Financial Stability Report. Tell us about the Financial Stability Report. economicsimportant reports Share Facebook 1 Answer Recent 0 Questions 307 Answers 60 Best Answers 0 Points View Profile [Deleted User] 2021-11-06T14:50:51+05:30Added an answer on November 6, 2021 at 2:50 pm Financial Stability Report: Reserve Bank of India (RBI) What is it about? 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 financial system. The Report also discusses issues relating to the development and regulation of the financial sector. It has released the 22nd issue of the Financial Stability Report (FSR) recently in January 2021. Key issues in the report Expected Increase in Gross Non-Performing Asset (GNPA) Ratio Macro stress tests for the Fiscal Year 2020-21 indicate that the GNPA ratio of all SCBs may increase from 7.5% in September 2020 to 13.5% by September 2021 under the baseline scenario and may escalate to 14.8% under a severe stress scenario. It indicates that the GNPA ratio of all SCBs may increase from 7.5% in September 2020 to 13.5% by September 2021 under the baseline scenario and may escalate to 14.8% under a severe stress scenario. This highlights the need for proactive building up of adequate capital to withstand possible asset quality deterioration. The Capital to Risk-weighted Assets Ratio (CRAR) of Scheduled Commercial Banks (SCBs) improved to 15.8% in September 2020 from 14.7% in March 2020, while their Gross Non-Performing Asset (GNPA) ratio declined to 7.5% from 8.4%, and the Provision Coverage Ratio (PCR) improved to 72.4% from 66.2% in the said period. Non-Banking Financial Companies (NBFCs) credit grew at a tepid pace of 4.4% on an annual YearOver-Year basis in comparison with the growth of 22% a year ago. Other areas of concern With the inter-bank market continuing to shrink and with a better capitalization of banks, the contagion risk to the banking system under various scenarios declined in comparison with March 2020. Bank credit growth has remained low-spirited, with the moderation being broad-based across bank groups. The credit flow to the manufacturing sector has been low-spirited when the output of the sector is emerging out of a prolonged contraction. Managing market volatility is challenging as there’s a disconnect between certain segments of the financial sectors and the real economy has been accentuating both in India and globally. The Capital to Risk-weighted Assets Ratio (CRAR) of the Scheduled Urban Co-operative Banks (SUCBs) declined from 9.70% to 9.24% between March and September 2020. 0 Reply Share Share Share on Facebook Share on Twitter Share on WhatsApp Leave an answerCancel replyYou must login or register to add a new answer. Related Questions Tell us about the Global Gender Gap Report 2021. Tell us about the Global Hunger Index 2020.
Financial Stability Report: Reserve Bank of India (RBI)
What is it about?
Key issues in the report