| Foreword |
| List of Select Abbreviations |
| Overview |
| Chapter I : Macrofinancial Risks |
| Global and Domestic Backdrop |
| Global Macrofinancial Vulnerabilities |
| Bond Market Fragilities |
| Elevated Asset Valuations and Concentrated Exposures |
| Risks Posed by NBFIs |
| Domestic Macroeconomic Conditions |
| Financial Markets |
| Banking System |
| NBFC Sector |
| Corporate Sector |
| Household Sector |
| Consumer Credit Segment |
| Box 1.1: Cyber Risk and Financial Stability |
| Box 1.2: Borrower Resilience – Income Level Analysis |
| Chapter II : Financial Institutions: Soundness and Resilience |
| Scheduled Commercial Banks (SCBs) |
| Deposit and Credit |
| Asset Quality |
| Sectoral Asset Quality |
| Credit Quality of Large Borrowers |
| Earnings and Profitability |
| Capital Adequacy |
| Liquidity |
| Resilience – Macro Stress Test |
| Sensitivity Analysis |
| Sensitivity Analysis of Small Finance Banks – Credit Risk |
| Bottom-up Stress Tests: Derivatives Portfolio |
| Bottom-up Stress Tests: Credit, Market and Liquidity Risk |
| Primary (Urban) Cooperative Banks |
| Stress Testing |
| Non-Banking Financial Companies (NBFCs) |
| Stress Test - Credit Risk |
| Stress Test - Concentration Risk |
| Stress Test - Liquidity Risk |
| Stress Testing of Mutual Funds |
| Stress Testing Analysis at Clearing Corporations |
| Financial Network and Contagion Analysis |
| Financial System Network |
| Contagion Analysis |
| Insurance Sector |
| Size and Structure |
| Financial Soundness |
| Scenario Analysis |
| Emerging Areas of Stress in Insurance Sector |
| Chapter III : Regulatory Initiatives in the Financial Sector |
| Global Regulatory Developments |
| Banking |
| Non-Bank Financial Intermediation (NBFI) |
| Financial Markets |
| Decentralised Finance and Digital Assets |
| Climate Finance |
| Artificial Intelligence |
| Initiatives from Domestic Regulators/Authorities |
| Directions on Lending to Related Parties |
| Risk-based Premium Framework for Deposit Insurance in India |
| Investments by Foreign Portfolio Investors in Debt Securities |
| Swap Facility for Foreign Currency (Non-resident) Accounts (Banks) Deposits |
| Swap Facility for External Commercial Borrowings and Overseas Foreign Currency Borrowings |
| Open Positions of Authorised Dealers |
| Unique Identifiers in Financial Markets - Directions |
| Reserve Bank of India (Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026 |
| Risk Management and Inter-Bank Dealings |
| Reporting of related party transactions by Authorised Dealer Category – I Banks - Directions |
| Directions on Asset Classification, Provisioning, and Income Recognition for Commercial Banks |
| Consolidation of Supervisory Instructions |
| Amendment Directions on ‘Investment Fluctuation Reserve’ |
| Reserve Bank of India (Commercial Banks - Capital Charge for Credit Risk – Standardised Approach) Directions, 2026 issued on April 27, 2026 |
| Quantum Technologies in the Financial Sector |
| Amendment in KYC Directions, 2025 |
| Technology-enabled KYC: Balancing Customer Convenience and Risk Management |
| Financial Sector Cybersecurity Strategy-Progress Update |
| Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) Framework for FPIs and FVCIs |
| Provisions relating to Strengthening Governance of Market Infrastructure Institutions (MIIs) |
| Relaxation on geo tagging requirement in India for NRIs while undertaking re-KYC. |
| Ease of Doing Investment – Special Window for Transfer and Dematerialisation of Physical Securities |
| Amendment to SEBI (Merchant Bankers) Regulations, 1992 and Specification of the Consequential Requirements with Respect to Such Amendments. |
| Verified Label for stock trading apps of brokers registered with SEBI, on Google Play Store |
| Project SUDARSAN- AI-Driven fraud Detection |
| Obligations on Credit Rating Agencies (CRAs) while undertaking rating of financial instruments falling under the purview of any other Financial Sector Regulator |
| Implementation of Indian Accounting Standards (Ind AS) in Insurance Sector |
| Amendments to the Master Circular issued under IRDAI (Corporate Governance for Insurers) Regulations, 2024 |
| Setting up of Policyholder’s Education and Protection Fund |
| Transitional arrangements for payment of Annual Fee and issuance of Certificate of Registration (Intermediaries) |
| Campaign on Motor Third Party (MTP) Insurance during Road Safety Week (January 11-17, 2026) |
| Measures to Address Systemic Issues in Health Insurance Landscape |
| Regulatory developments for Investments of Insurers |
| Investments in Public Limited Special Purpose Vehicles (SPVs) Engaged in Infrastructure Sector |
| IFSCA (Fund Management) (Amendment) Regulations, 2026 |
| Other developments |
| Evolution of Emerging Frontier AI models |
| Customer Protection |
| Enforcement |
| Deposit Insurance |
| Corporate Insolvency Resolution Process |
| Developments in International Financial Services Centre (IFSC) |
| Pension Funds |
| Annex 1 : Methodologies |
| Annex 2 : Important Domestic Regulatory Measures |
| Reserve Bank of India (RBI) |
| Securities and Exchange Board of India (SEBI) |
| Insurance Regulatory and Development Authority of India (IRDAI) |
| Pension Fund Regulatory and Development Authority (PFRDA) |
| Insolvency and Bankruptcy Board of India (IBBI) |
| International Financial Services Centres Authority (IFSCA) |
| LIST OF CHARTS |
| Chapter I |
| 1.1 Optimism in Financial Markets |
| 1.2 Market Implied Monetary Policy Path |
| 1.3 Balance of Payments |
| 1.4 Financial Markets Tested, but Remain Resilient |
| 1.5 India’s Sound Macroeconomic Fundamentals |
| 1.6 Global Public Debt Rising While Fiscal Deficits Remain Large |
| 1.7 Rise in Bond Yields |
| 1.8 Bond Market Trends |
| 1.9 Hedge Fund Exposures to Sovereigns Increased Amid High Leverage |
| 1.10 Financial Markets Remain Upbeat |
| 1.11 Elevated Asset Valuations and Concentrated Exposures |
| 1.12 Rising Debt Financing by AI Companies |
| 1.13 Capital Flows Driven by Carry Trade |
| 1.14 Expanding Global NBFI Footprint |
| 1.15 Relative Value Trades in the US Treasury Market |
| 1.16 Retail Investors Look to Exit Private Credit Funds |
| 1.17 Trends in Current Account |
| 1.18 Trends in Capital Account |
| 1.19 Limited External Vulnerability and Adequate Reserves |
| 1.20 Fiscal Pressure Emanating from Oil Price Shock |
| 1.21 Foreign Exchange Market Trends |
| 1.22 Some Frictions Persist in Monetary Policy Transmission |
| 1.23 Trends in Sovereign Bond Market |
| 1.24 Demand-Supply Dynamics in Government Bond Markets |
| 1.25 Indian Equity Market Performance and Ownership |
| 1.26 FPI Equity Outflows Amid Heightened Geopolitical Risks |
| 1.27 Resilient Equity Market Backstopped by Institutional Demand |
| 1.28 Moderation in Valuations and Earnings Downgrade |
| 1.29 Nifty 50 – Returns Decomposition |
| 1.30 Corporate Bond Issuances Fell Amid Rise in Yields and Bank Lending |
| 1.31 Corporate Bond Market Trends |
| 1.32 Corporate Bond Spreads and Rating |
| 1.33 Growing AUM of the Domestic Mutual Fund Industry |
| 1.34 Resilient SIP Flows |
| 1.35 Net Inflows in MF Schemes |
| 1.36 Domestic Passive Fund Flows |
| 1.37 Sound Financials Strengthen the Banking System |
| 1.38 Improving Asset Quality and Credit Cost Driving Credit Growth |
| 1.39 Evolving Liability Profile and Impact on Cost of Funds |
| 1.40 Impact of Waning Deposit Franchise on Profitability and Liquidity |
| 1.41 Banks Softened their Margin Pressure Despite Decline in CASA Share |
| 1.42 Strong Credit Growth Alongside Benign Asset Quality |
| 1.43 Microfinance Sector – Recovery in Credit Amid Falling Active Borrowers |
| 1.44 Banking System Remains Resilient |
| 1.45 NBFC Sector – Key Financial Parameters |
| 1.46 Moderation in NBFCs’ Credit Growth Amid Strong Retail Lending and Lower Credit Costs |
| 1.47 NBFCs Rebalance Their Funding Mix to Contain Funding Costs |
| 1.48 Improving Asset Quality in NBFCs |
| 1.49 NBFC Credit to MSME and Microfinance Sectors |
| 1.50 Fintech Firms Drive Small-Ticket Personal Loans Amid Rising Delinquencies |
| 1.51 Non-Banking Stability Indicator and Map |
| 1.52 Nominal Sales Growth - Listed Private Non-Financial Companies |
| 1.53 Debt-serviceability of Listed Private Corporates |
| 1.54 Select Ratios of Listed Private Manufacturing Companies |
| 1.55 Private Corporate Investment and Capacity Utilisation |
| 1.56 India’s Household Debt Relatively Low and Driven Primarily by Non-Housing Retail Loans |
| 1.57 Consumption Loans Dominate Household Borrowings |
| 1.58 Higher Credit Limit Housing Loans Growing Faster |
| 1.59 Risk Profile of Household Borrowings Improved |
| 1.60 Consumer Segment Loan Growth Remains Robust |
| 1.61 Asset Quality of Consumer Segment Loans Improving |
| 1.62 Gold Loans Driving Consumer Segment Loans |
| 1.63 Gold Loans Driven by Repeat Customers with Rising Leverage |
| 1.64 LTV Ratio of Banks and Non-Banks has Improved |
| 1.65 Rising Gold Loans and Moderating Personal Loan Balances in Riskier Borrower Categories |
| Chapter II |
| 2.1 Deposit and Credit Profile of SCBs |
| 2.2 Select Asset Quality Indicators |
| 2.3 Sectoral Asset Quality Indicators |
| 2.4 Select Asset Quality Indicators of Large Borrowers |
| 2.5 Select Performance Indicators of SCBs |
| 2.6 Capital Adequacy |
| 2.7 Liquidity Ratios |
| 2.8 Macro Scenario Assumptions |
| 2.9 Projection of CET1 Capital Ratios |
| 2.10 CRAR Projection |
| 2.11 Projection of GNPA Ratio |
| 2.12 Credit Risk – Shocks and Outcomes |
| 2.13 Credit Concentration Risk – Borrowers' Exposure |
| 2.14 Credit Concentration Risk Posed by Top 100 Borrowers |
| 2.15 AFS and FVTPL (including HFT) Portfolios and Share of Bank-Groups |
| 2.16 HTM Portfolio – Composition |
| 2.17 HTM Portfolio – Unrealised Gain/ Loss as on March 31, 2026 |
| 2.18 Equity Price Risk – Fall in System Level CRAR |
| 2.19 LCR-based Liquidity Stress Test |
| 2.20 Credit Risk for SFBs - Shocks and Outcomes |
| 2.21 Net MTM of Total Derivatives Portfolio (Chargeable to P&L) |
| 2.22 MTM Impact of Shocks on Derivatives Portfolio of Select Banks |
| 2.23 Income from the Derivatives Portfolio |
| 2.24 Credit and Market Risks |
| 2.25 Liquidity Risk – Liquid Asset Ratio |
| 2.26 UCBs - Performance and Health Indicators |
| 2.27 Stress Test of UCBs |
| 2.28 NBFC – Key Financial Parameters |
| 2.29 NBFC – Layer wise – Key Financial Parameters |
| 2.30 Credit Risk in NBFCs - System Level |
| 2.31 Credit Concentration Risk – Exposures |
| 2.32 Range (Surplus (+)/ Deficit (-)) of LR-RaR and LR-CRaR Maintained by AMCs over AMFI Prescribed Limits |
| 2.33 Bilateral Exposures between Entities in the Financial System |
| 2.34 Instrument-wise Exposure among Entities in the Financial System |
| 2.35 Network Plot of the Financial System – March 2026 |
| 2.36 Net Receivables (+ve)/ Payables (-ve) |
| 2.37 Inter-Bank Market |
| 2.38 Composition of Fund-Based Inter-Bank Market |
| 2.39 Network Structure of the Indian Banking System (SCBs + SUCBs) – March 2026 |
| 2.40 Connectivity Statistics of the Banking System (SCBs) |
| 2.41 Gross Receivables of AMC-MFs from the Financial System - Share of Top 4 Borrower Groups |
| 2.42 Gross Receivables of Insurance Companies from the Financial System - Share of Top 3 Borrower Groups |
| 2.43 Gross Payables of NBFCs to the Financial System |
| 2.44 Gross Payables of HFCs to the Financial System |
| 2.45 Gross Payables and Receivables of AIFIs to the Financial System |
| 2.46 Contagion Impact of Macroeconomic Shocks (Solvency Contagion) |
| 2.47 Total Premium |
| 2.48 Market share |
| 2.49 Fund-wise composition of AUM |
| 2.50 Fund-wise Growth Rate |
| 2.51 Life - Investment Class-wise Composition |
| 2.52 General - Investment Class-wise Composition |
| 2.53 Total Benefits Paid by Life Insurers |
| 2.54 Net Incurred Claims of General Insurers |
| 2.55 Expenses of Life Insurers |
| 2.56 Expenses of General Insurers |
| 2.57 Fund-wise Gross Yields of Top 10 Life Insurers |
| 2.58 Gross Yields of Top 10 General Insurers |
| 2.59 Equity Share Capital of Life and General Insurers |
| 2.60 Profitability of Life Insurers |
| 2.61 Profitability of General Insurers |
| 2.62 Grievances of Life and General insurers |
| 2.63 Composition of ASM of Top 10 Life Insurers |
| 2.64 Composition of ASM of Top 10 General Insurers |
| 2.65 Scenario Analysis for ASM of Top 10 Life Insurers |
| 2.66 Scenario Analysis for ASM of Top 10 General Insurers |
| 2.67 Capital Buffer above Regulatory Minimum Solvency for Top 9 Private Life Insurers |
| 2.68 Capital Buffer above Regulatory Minimum Solvency for Top 10 General Insurers |
| Chapter III |
| 3.1 NPS and APY – Subscribers and AUM Trend |
| 3.2 NPS and APY AUM: Asset Class-wise Bifurcation |
| LIST OF TABLES |
| Chapter I |
| 1.1 External Commercial Borrowing (ECB) Flows |
| 1.2 Resource Mobilisation in the Indian Securities Market |
| 1.3 Personal Loans - Score Migration for Risk Categories |
| Chapter II |
| 2.1 Health Tracker – Scheduled Commercial Banks (SCBs) |
| 2.2 Sensitivity Analysis – Industry Sub-Sector Level |
| 2.3 PV01 of AFS and FVTPL (including HFT) Portfolios |
| 2.4 Interest Rate Risk – Impact of Stress Test on Bank-groups |
| 2.5 Other Operating Income - Profit/ (Loss) on Securities Trading |
| 2.6 Earnings at Risk (EAR) - Traditional Gap Analysis (TGA) |
| 2.7 Market Value of Equity (MVE)- Duration Gap Analysis (DGA) |
| 2.8 NBFCs’ Sources of Funds |
| 2.9 Liquidity Risk in NBFCs |
| 2.10 Stress Testing of Open-Ended Debt Schemes of Mutual Funds – Summary Findings – March 2026 |
| 2.11 Summary of Stress Tests and Liquidity Analysis of MF Midcap and Smallcap Equity Schemes |
| 2.12 Minimum Required Corpus of Core SGF Based on Stress Testing Analysis at Clearing Corporations |
| 2.13 Contagion Losses due to Bank Failure – March 2026 |
| 2.14 Contagion Losses due to NBFC Failure – March 2026 |
| 2.15 Contagion Losses due to HFC Failure – March 2026 |
| 2.16 Life Insurance – Solvency |
| 2.17 General Insurance – Solvency |
| 2.18 Shock Scenarios |
| 2.19 Life Insurer-wise Distribution of Solvency |
| 2.20 General Insurer-wise Distribution of Solvency |
| Chapter III |
| 3.1 Category of Complaints Received under the RB-IOS, 2021 |
| 3.2 Type/Category of Complaints |
| 3.3 Status of Disputes on SmartODR.in |
| 3.4 Complaints in Bima Bharosa |
| 3.5 Complaints with Insurance Ombudsmen |
| 3.6 Coverage of Deposits |
| 3.7 Bank Group-wise Deposit Protection Coverage |
| 3.8 Deposit Insurance Premium |
| 3.9 Deposit Insurance Fund and Reserve Ratio |
| 3.10 Status of Corporate Insolvency Resolution Process |
| 3.11 Sectoral Distribution of CIRPs |
| 3.12 Outcome of CIRPs, Initiated Stakeholder-wise |