The Indian economy is growing at a robust pace, driven by strong domestic demand, low inflation and healthy bank balance sheets, the Reserve Bank of India said in its December 2025 edition of the Financial Stability Report released on Wednesday. The central bank said the domestic financial system remains robust and resilient, supported by strong balance sheets, easy financial conditions and low financial market volatility. ADVERTISEMENT"Nonetheless, there are near-term risks from external uncertainties - geopolitical and trade-related," the report said. As of September 2025, the ratio stood at a multi-decade low of 2.1 per cent, according to the half-yearly Financial Stability Report. Under adverse scenarios, the GNPA ratio may rise to 3.2 per cent and 4.2 per cent, based on the RBI’s stress test results.

Source: The Telegraph December 31, 2025 21:03 UTC