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Editor's Take: RBI’s Financial Stability Report raises the red flag

Updated : January 12, 2021 01:59 PM IST

The Reserve Bank of India released the 22nd issue of the Financial Stability Report (FSR) on Monday. The report reflects an assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the risks to financial stability in the country and its resilience in the context of the development and regulation issues of the financial sector.

The Indian banking system's bad loans may rise to a 20-year high on the back of COVID-19 induced stress, the central bank has noted adding that gross non-performing assets (NPAs) of scheduled commercial banks in India may rise to anywhere between 13.5 to 14.8 percent by September 2021 from 7.5 percent as of September 2020.

The report also points out that at least 4 banks will fall below the minimum capital requirement by September.

Watch accompanying video of CNBC-TV18’s Latha Venkatesh with the key numbers and implications of the report.
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