Most banks have sufficient capital to withstand even adverse financial shocks: RBI

Macro stress tests conducted by the Reserve Bank of India (RBI) indicate that most banks possess sufficient capital to withstand even adverse stress scenarios, the central bank's latest Financial Stability Report (FSR) showed on Monday. As of September 2024, the capital adequacy ratio (CAR) for all banks stands at 16.60%, reflecting the sector's healthy financial position.

Share Market View All Nifty Gainers View All Company Value Change %Change RBI MACRO STRESS TEST RESULT: BY MARCH 2026 Capital Adequacy All Banks As Of Sept 2024 16.60% Baseline scenario 16.50% Adverse scenario 1 14.



30% Adverse scenario 2 15.70% In the baseline scenario, banks are expected to maintain a capital adequacy ratio of 16.50%.

Under the first adverse scenario, which assumes persisting geopolitical risks and escalation of global financial market volatility, the CAR is projected to drop to 14.3%. Under the second adverse scenario, which assumes global and idiosyncratic risk factors blend to trigger a synchronised sharp growth slowdown in key economies, the CAR is expected to fall to 15.

70%. Stress tests validate resilience of Mutual Funds While most of the banking sector has sufficient capital for difficult economic conditions, the stress tests also reveal that mutual funds and clearing corporations validate their resilience. NBFCs have sizable capital buffers The RBI report stated that "NBFCs remain healthy with sizable capital buffers, robust interest margins and earnings and improving asset quality.

" According to the stress test results, as of September 2024, the capital adequacy ratio (CAR) for NBFCs was at 23.60%, well above the baseline requirement of 21.20%.

The table below shows the full stress test results for RBI's capital adequacy: *Conducted on a sample of 162 NBFCs forming 92% of total advances Scenario GNPA Capital Adequacy (CRAR) No. of NBFCs Failing to Meet Min CRAR As of Sept 2024 2.90% 23.

60% - Baseline 3.40% 21.20% 11 Medium Risk 4.

70% 20.50% 14 High Risk 6.00% 20.

20% 15 NBFCs are backed by sizable capital buffers, robust interest margins, and improving asset quality. The insurance sector also maintains a consolidated solvency ratio well above the regulatory minimum, further contributing to the overall financial system's stability..