RBI's Financial Stability Report flags rising NPAs, global economic risks

Indian banking sector stable, but global debt and economic volatility loom large

As the eventful year 2024 drew to a close, the bi-annual “Financial Stability Report” (FSR) of the Reserve Bank of India (RBI), published this week, offered an overview of the current state of the Indian financial system and provided a broad understanding of what to expect in the year ahead. In terms of financials, gross non-performing assets (GNPA) in the banking system — supported by lower slippages, write-offs, and credit demand — declined to a 12-year low of 2.6 per cent in September 2024, while net non-performing assets were at 0.6 per cent of the book. Although balance sheets in