Financial Stability Report, December 2024’

The Reserve Bank of India (RBI) released the ‘Financial Stability Report, December 2024,’ a biannual publication assessing the stability of the Indian financial system.

• The report projects India’s Gross Domestic Product (GDP) to grow at 6.6% in 2024-25, driven by a revival in rural consumption, government spending, and services exports.
• The central government’s debt-to-GDP ratio is expected to decrease from its pandemic peak of 62.7% in 2020-21 to 56.8% by 2024-25.
• States’ outstanding liabilities are projected to decline from 31% to 28.8% during the same period.
• Scheduled Commercial Banks (SCBs) have shown improved soundness, with strong profitability, declining non-performing assets (NPAs), and adequate capital and liquidity buffers.
• The report notes that under baseline stress scenarios, the Gross Non-performing Asset (GNPA) ratio could increase from 2.6% in September 2024 to 3% by March 2026.
• The Financial Stability and Development Council (FSDC) is a non-statutory body set up by the Government of India in 2010 as the apex-level forum.
• The FSDC is chaired by the Union Finance Minister and includes heads of financial sector regulators such as the RBI, SEBI, PFRDA, IRDA, and FMC, along with the Finance Secretary.