RBI's Swaminathan J presses for 'resilience by design' as banks' NPAs hit multi-decade low
India's financial system enters uncertain phase with stronger balance sheets, but RBI warns risk builds quietly in good times and resilience must be built before it is tested.
What changed
- RBI Deputy Governor delivers speech on banking resilience at Columbia University
- Transparent stress recognition, balance sheet strengthening, and calibrated regulation are key dimensions
- Risk builds in favourable conditions; resilience must be designed proactively
The read
India's banking system enters an uncertain global phase with multi-year high capital buffers and NPAs at multi-decade lows, Deputy Governor Swaminathan J said. CPI inflation stood at 3.5% in April, net FDI remained positive for the second straight month, and listed companies posted double-digit growth in sales and operating profit in Q4:2025-26. Yet the RBI's message is caution: the best time to build resilience is when conditions are favourable. Risk builds quietly in good times and announces itself loudly when conditions change. The speech outlines five dimensions: transparent recognition, balance sheet strengthening, stronger supervision, calibrated regulation, and resilience within banks. The verdict: strength today must translate into discipline tomorrow.
Key numbers
- CPI inflation: 3.5% (April)
- Net FDI: positive for second consecutive month (March)
- Listed private non-financial companies: double-digit sales and operating profit growth in Q4:2025-26
- Listed banking and financial companies: surge in net profit growth
Primary source: rbi.org.in