Latest news with #SCBs
Business Standard
11 hours ago
- Business
- Business Standard
Insurance companies second largest net providers of funds to financial system as at end-Mar-25
According to a latest update from the Reserve Bank of India, with gross receivables at Rs 11.12 lakh crore against gross payables at Rs 0.91 lakh crore, insurance companies were the second largest net providers of funds to the financial system as at end-March 2025. SCBs (primarily PVBs) were the largest recipients of their funds, followed by NBFCs and HFCs. Insurance companies provided funds mostly through LT debt and equity, accounting for 90 per cent of receivables, with limited exposure to ST instruments. As of December 2024, and the previous three quarters, the aggregate solvency ratio for insurance companies remained above the prescribed threshold. The solvency ratio of the life insurance companies remained at 204 per cent, while non-life insurance companies maintained a solvency ratio of 166 per cent as of December 2024.
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Business Standard
a day ago
- Business
- Business Standard
Indian scheduled commercial banks' gross NPA ratio at 15-year low
Private sector banks' gross NPA ratio was stable at 2.8 per cent while foreign banks saw a decline to 0.9 per cent from 1.2 per cent Subrata Panda Listen to This Article The Indian scheduled commercial banks' (SCBs') asset quality continues to improve, with gross and net non-performing asset (NPA) ratios at a multi-year low, according to the Reserve Bank of India's (RBI's) latest Financial Stability report. While overall gross NPAs were lower at 2.3 per cent (of gross advances) as of March 31, 2025, compared to 2.8 per cent a year ago, public-sector banks saw a sharp reduction from 3.7 per cent in March 2024 to 2.8 per cent in March 2025. Private-sector banks' gross NPA ratio was stable at 2.8 per cent, while foreign banks declined to 0.9 per cent
Business Standard
2 days ago
- Business
- Business Standard
Weighted average lending rate stood at 9.2% in May
RBI stated that the weighted average lending rate (WALR) on fresh rupee loans of SCBs declined to 9.20 per cent in May 2025 from 9.26 per cent in April 2025. The WALR on outstanding rupee loans of SCBs dropped marginally to 9.69 per cent in May 2025 from 9.70 per cent in April 2025. 1-Year median Marginal Cost of Funds based Lending Rate (MCLR) of SCBs moderated to 8.90 per cent in June 2025 from 8.95 per cent in May 2025. The share of External Benchmark based Lending Rate (EBLR) linked loans in total outstanding floating rate rupee loans of SCBs was 61.6 per cent at end-March 2025 (60.6 per cent at end-December 2024), while that of MCLR linked loans was 34.9 per cent (35.9 per cent at end-December 2024). The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of SCBs stood at 6.11 per cent in May 2025 as compared to 6.34 per cent in April 2025. The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits of SCBs was 7.07 per cent in May 2025 (7.10 per cent in April 2025).
India Gazette
2 days ago
- Business
- India Gazette
Indian economy remains a key driver of global growth amidst global challenges: RBI report
New Delhi [India], June 30 (ANI): Despite an uncertain and challenging global economic backdrop, the Indian economy remains a key driver of global growth -- underpinned by sound macroeconomic fundamentals and prudent macroeconomic policies, RBI said in its latest Financial Stability Report. Elevated economic and trade policy uncertainties are testing the resilience of the global economy and the financial system. 'Financial markets remain volatile, especially core government bond markets, driven by shifting policy and geopolitical environment. Alongside, existing vulnerabilities such as soaring public debt levels and elevated asset valuations have the potential to amplify fresh shocks,' the highlights of the RBI report read. The domestic financial system, according to the RBI, is exhibiting resilience fortified by healthy balance sheets of banks and non-banks. Financial conditions have eased, supported by accommodative monetary policy and low volatility in financial markets. The strength of the corporate balance sheets also lends support to overall macroeconomic stability, the RBI noted. 'The soundness and resilience of scheduled commercial banks (SCBs) are bolstered by robust capital buffers, multi-decadal low non-performing loans ratio and strong earnings,' RBI said in its report. In the banking sector, results of macro stress tests affirm that most SCBs have adequate capital buffers relative to the regulatory minimum even under adverse stress scenarios. 'Stress tests also validate the resilience of mutual funds and clearing corporations,' it supplemented. Non-banking financial companies (NBFCs) remain healthy with sizable capital buffers, robust earnings and improving asset quality. As was widely expected, the Indian economy grew by 6.5 per cent in real terms in the recently concluded financial year 2024-25, official data showed recently. The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25. In 2023-24, India's GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy. According to official data, the economy grew 8.7 per cent and 7.2 percent, respectively, in 2021-22 and 2022-23. To realise the vision of 'Viksit Bharat', a developed nation dream by 2047, India will need to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two, the Economic Survey document for 2024-25 tabled on January 31 asserted. (ANI)
Indian Express
2 days ago
- Business
- Indian Express
RBI stress tests: Banks gross NPA may rise to 2.5% in March 2027 from 2.3% in March 2025
The gross non-performing assets (GNPA) ratio of scheduled commercial banks (SCBs) may marginally rise to 2.5 per cent in March 2027 from 2.3 per cent in March 2025, the Reserve Bank of India's Financial Stability Report (FSR) showed. The estimate for GNPA ratio for March 2027 is based on the macro stress tests that project capital ratios of banks under three scenarios – a baseline and two adverse macro scenarios over a two-year horizon, incorporating credit risk, market risk and interest rate risk in the banking book in the framework. 'The aggregate GNPA ratio of the 46 banks may marginally rise from 2.3 per cent in March 2025 to 2.5 per cent in March 2027 under the baseline scenario and to 5.6 per cent and 5.3 per cent, under adverse scenario 1 and adverse scenario 2, respectively,' the RBI's Financial Stability Report for June 2025 showed. While the baseline scenario is derived from the forecasted path of macroeconomic variables, the two adverse scenarios are hypothetical stringent stress scenarios. The adverse scenario 1 assumes a volatile global environment with heightened geopolitical risks and escalation of global financial market volatility. The adverse scenario 2 assumes a synchronised sharp growth slowdown in key global economies. The report said that the soundness and resilience of SCBs are bolstered by robust capital buffers, multi-decadal low non-performing loans ratio and strong earnings. The macro stress tests further revealed that the aggregate capital to risk-weighted assets ratio (CRAR) of 46 major SCBs may marginally dip to 17 per cent by March 2027 from 17.2 per cent in March 2025, under the baseline scenario. It may decline to 14.2 per cent under adverse scenario 1, and to 14.6 per cent under adverse scenario 2. However, none of the banks would fall short of the regulatory minimum requirement of 9 per cent even under the adverse scenarios, the report said. The common equity tier 1 (CET1) capital ratio of the select 46 banks may rise from 14.6 per cent in March 2025 to 15.2 per cent by March 2027 under the baseline scenario. However, it may fall to 12.5 per cent under adverse scenario 1, and to 12.9 per cent under adverse scenario 2. None of the banks would breach the regulatory minimum requirement of 5.5 per cent under any of these scenarios, the report showed. The RBI report said that stress tests on banks' credit concentration – considering top individual borrowers according to their standard exposures – show that in the extreme scenario of the top three individual borrowers of respective banks defaulting, the system level CRAR would decline by 90 bps and no bank would face a situation of a drop in CRAR below the regulatory minimum of 9 per cent. In this extreme scenario, four banks would experience a fall of more than two percentage points in their CRARs. The report said that non-banking financial companies (NBFCs) remain healthy with sizable capital buffers, robust earnings and improving asset quality. A system level stress test conducted on a sample of 158 NBFCs showed that under the baseline scenario, the system-level GNPA ratio of the sample NBFCs may rise from 2.9 per cent in March 2025 to 3.3 percent in March 2026. Consequently, their aggregate CRAR may dip to 21.4 per cent in March 2026 from 23.4 per cent in March 2025. Under the baseline scenario, 10 NBFCs (all in the middle layer) having a share of 2.1 per cent of total advances of all NBFCs (upper layer + middle layer) may breach the regulatory minimum capital requirement of 15 per cent.
