The Reserve Bank of India (RBI) said the Indian banking system and non-banking financial companies (NBFCs) remain sound and resilient, even as it cautioned that the high level of interconnectedness between them merits close attention.
The central bank underscored that high capital ratios, improved asset quality, and robust earnings growth are the reasons for banks and NBFCs being sound and resilient.
This is supporting double-digit credit growth and domestic economic activity, per the RBI’s report on “Trend and Progress of Banking in India 2022–23.”
- Read:Indian banks outperform global peers on key financial parameters: McKinsey report
However, sustaining this improvement requires further strengthening of governance and risk management practices and the building up of additional buffers. The report assessed that the Indian banking system is well positioned to improve further, with better asset quality, high capital adequacy, and robust profitability.
- Read:Economy remains resilient, banking system fortified by low level of NPAs: RBI
The financial indicators of NBFCs are also set…
