Repayment stress

Early warning signs from retail loans

The Financial Stability Report (FSR), released by the Reserve Bank of India (RBI) last week, made it clear that the financial system was broadly resilient, and scheduled commercial banks in particular had emerged from the stresses of the pandemic reasonably well and were capable of performing their functions. The period of the pandemic featured several emergency measures that supported the purchasing power of the population and the lending ability of banks. These measures have now largely been withdrawn. They could have, as they were withdrawn, left the banks with a large proportion of bad debts. However, this does not seem