Document title: RBI Financial Stability Report, June 2026
Issuing authority: Reserve Bank of India (RBI)
Date: 30 June 2026
Macro Outlook
The report notes that despite repeated shocks, the global financial system has demonstrated notable resilience, with markets remaining orderly after an initial bout of volatility following the outbreak of the West Asia conflict. However, global financial stability risks remain elevated. Persistent supply‑chain uncertainties could tighten financial conditions and revive inflationary pressures. Elevated public debt, bond‑market fragilities, stretched asset valuations and leveraged non‑bank financial institutions (NBFIs) are identified as key vulnerabilities that could amplify future shocks.
India’s sound macro‑economic fundamentals place it in a stronger position than many peers, providing greater resilience to external shocks than in past crisis episodes. The balance of risks has turned favourable, supported by an interim peace deal and recent policy measures by the Government and the RBI aimed at strengthening capital inflows.
Banking and Credit
The domestic financial system remains resilient, underpinned by strong bank balance sheets. Scheduled commercial banks (SCBs) are described as safe and sound, supported by strong capital and liquidity buffers, continued improvement in asset quality and stable profitability. Macro stress‑test results indicate that the banking system is well‑positioned to absorb potential shocks, with aggregate capital ratios projected to remain comfortably above regulatory thresholds even under hypothetical adverse scenarios.
External Sector and Currency
Recent policy measures by the Government and the RBI have been aimed at strengthening capital inflows, contributing to the favourable shift in the balance of risks. The report highlights that these steps, together with the interim peace deal, have improved India’s external sector resilience.
Financial Stability
Non‑bank financial companies (NBFCs) remain financially sound, supported by strong capitalisation, healthy profitability and improving asset quality. The insurance sector continues to display balance‑sheet resilience, with the solvency ratio of life insurers remaining above the minimum regulatory threshold.
Overall, the June 2026 Financial Stability Report underscores the resilience of India’s financial system across banks, NBFCs and insurers, while flagging persistent global risks that require continued vigilance.