Gross NPA of banks may rise to 12.5% by March 2021: RBI Financial Stability Report

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News: The Reserve Bank of India(RBI) has released its 21st Financial Stability Report.

Facts:

  • Financial Stability Report(FSR): It is a bi-annual report published by the Reserve Bank of India(RBI).
  • Aim: To review the nature, magnitude and implications of risks that may have a bearing on the macroeconomic environment, financial institutions, markets and infrastructure.
  • The report is also the collective assessment of the Sub-Committee of the Financial Stability and Development Council(FSDC) on risks to financial stability.

Additional Facts:

  • Financial Stability and Development Council(FSDC): It is an apex level body setup in 2010 on the recommendations of Raghuram Rajan committee(2008).
  • Objectives: To strengthen and institutionalize the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.
  • Composition: The Chairman of the Council is the Finance Minister and its members include heads of Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA), Secretaries of various Departments, Chief Economic Adviser among others.
  • FSDC Sub-committee: It has been set up under the chairmanship of Governor, RBI.It meets more often than the full Council.