- Gross Non-Performing Assets (GNPA) of Scheduled Commercial Banks (SCBs) declined to a multi-decadal low of 1.8% as of March 2026, reflecting continued improvement in banks' asset quality.
- Banks remained well-capitalised, with the Capital to Risk-weighted Assets Ratio (CRAR) at 17.7% and the Common Equity Tier-1 (CET1) ratio at 15.3%, both at multi-decade highs.
- RBI's stress tests indicate that banks will continue to meet minimum capital requirements even under severe stress scenarios, highlighting the resilience of the banking sector.
- The report also noted that NBFCs remain financially sound, supported by improved asset quality, adequate capital, and healthy profitability.
- Despite the strong domestic banking system, RBI cautioned against global risks, including geopolitical conflicts, rising household debt, rapid growth in gold loans, AI-driven cyber threats, and the possibility of an AI-related asset price bubble.
- The report emphasised that India's strong macroeconomic fundamentals provide greater resilience to external shocks than in previous crisis periods.
Question:
Q1. According to the RBI's Financial Stability Report (June 2026), the Gross Non-Performing Assets (GNPA) ratio of Scheduled Commercial Banks (SCBs) stood at what level as of March 2026?a) 3.2%
b) 2.5%
c) 1.8%
d) 1.2%
Answer: c) According to the RBI Financial Stability Report (June 2026), the GNPA ratio of Scheduled Commercial Banks (SCBs) declined to 1.8%, the lowest level in several decades, reflecting strong asset quality, improved profitability, and a resilient banking system.
