India’s economic growth continues to demonstrate resilience, supported by strong domestic demand, moderate inflation, and careful macroeconomic management, according to the Reserve Bank of India’s (RBI) Financial Stability Report released recently. The report emphasised that the nation’s financial system remains solid, bolstered by strong balance sheets, low market volatility, and accommodative financial conditions.
Scheduled commercial banks in India are showing sound health, with robust capital and liquidity buffers, improving asset quality, and consistent profitability. Non-banking financial companies (NBFCs) have also maintained stability, reporting strong earnings and strengthening asset profiles. Meanwhile, the insurance sector remains secure, with solvency ratios comfortably above the regulatory minimum.
The report additionally noted that global economic conditions have been resilient, supported by fiscal measures and rapid technological advancements, including progress in artificial intelligence, which continues to shape growth prospects worldwide.
Household debt in India rose to 41.3% of GDP as of March 2025, mainly due to higher consumption-related borrowing. Despite this increase, India still maintains relatively low household indebtedness compared with other emerging economies, reflecting a stable debt profile.
The RBI stressed that its gradual policy approach aims to sustain economic growth while ensuring macroeconomic stability. The Financial Stability Report confirms that India’s financial institutions, from banks to NBFCs and insurers, remain strong, laying a solid foundation for continued growth and resilience in the years ahead.
