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RBI Released 21st Issue of Financial Stability Report, July 2020

Published on July 26, 2020
Current Context: The Reserve Bank of India has released the 21st issue of Financial Stability Report, July 2020.
RBI Released 21st Issue of Financial Stability Report, July 2020

  • FSR is the study and assessment of FSDC (Financial Stability and Development Council).
  • The reports draw the study of risks to financial stability, resilience to the financial system in order to develop and regulate the financial sector of the country.
  • The COVID-19 has affected the fiscal, monetary and regulatory inventions on a large scale. Also, the non-financial sector has affected large economic losses due to the pandemic.
  • To resolve these issues arisen due to the outbreak of a pandemic, the GOI and financial sector regulators eased operational constraints so that market integrity will be maintained.
  • During the first half of 2019-2020, bank credit was considerably weakened, which was thus slid down further with moderate rate becoming broad-based across bank groups.
  • As per the report, Capital to Risk-weighted Assets Ratio (CRAR) was 15% in September 2019 which edged down to 14.8% in March 2020. The Gross Non-Performing Assets (GNPA) reduced to 8.5% from 9.3%. Provision Coverage Ratio (PCR) improved to 65.4% from 61.6% from September 2019 to March 2020.
  • The report has suggested that the GNPA ratio of all SCBs may rise from 8.5% in March 2020 to 14.8% by March 2021.
  • The report revealed that total bilateral exposures among the financial system entities declined marginally during 2019-2020, with inter-bank continuing to shrink and with a better capitalization of PSBs, there might be a reduction in contagion losses to the banking system under a various scenario in relation to the previous year.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das


Q.1 As per 21st issue of Financial Stability Report, July 2020 by RBI, CRAR reduced to ___% in March 2020 from 15% in September 2019?
a. 14.5%
b. 13.7%
c. 14.8%
d. 12.9%
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