RBI Governor Sanjay Malhotra highlighted the strength of India's banking system

Current Context: On 7 November 2025, RBI Governor Sanjay Malhotra highlighted the strength of India’s banking system at the SBI Banking & Economics Conclave in Mumbai.

• He noted that the Capital to Risk‑Weighted Assets Ratio (CRAR) has risen to 17.5% in 2025, compared to 13.5% in 2015.
• India’s Gross NPAs have sharply declined to 2.3% in 2025, down from over 11% in 2018.
• Banks are now reporting higher profitability and stronger balance sheets, reflecting resilience.
• He emphasized that financial stability remains the cornerstone of RBI’s policy framework.
• India also witnessed USD 30.4 billion capital inflows (Apr–Jul 2025), strengthening external resilience.

Question:

Q.1 According to the RBI Governor, India’s Capital to Risk-Weighted Assets Ratio (CRAR) rose to 17.5% in 2025. What was the CRAR in 2015?
a) 10.2%
b) 13.5%
c) 11.8%
d) 15.0%

Answer: b) CRAR improved from 13.5% (2015) to 17.5% (2025), showing improved capital adequacy of banks. This can be used to assess long-term strengthening of the banking system.