The Reserve Bank of India (RBI) said the gold import growth slowed “substantially” in May 2026 compared to April, and the most significant short-term threat to the financial system was identified as AI-enabled cyberattacks.
Despite these threats, banks remained safe and sound, supported by strong capital buffers, the central bank added.
In its June 2026 Financial Stability Report published on Tuesday, the RBI claimed that India’s macroeconomic foundations served as a cushion against outside shocks. However, the report noted that supply-chain interruptions and shocks to energy prices continued to pose a threat to the economy.
Interestingly, on May 11, PM Modi had urged Indians to avoid purchasing gold for a minimum of a year, stating that amid a global crisis, gold purchases would further strain the country’s foreign exchange reserves.
India’s financial stability risks were still under control despite global uncertainty; however, it cautioned that frequent external shocks might tighten financial conditions, impact the macroeconomic outlook and have a direct effect on domestic financial stability, the report highlighted.
Despite external challenges, the RBI reported that data indicated growth was steady in the first quarter of FY27. It stated that while an interim US-Iran peace agreement could boost economy, high oil prices could have an impact on India’s growth in FY27.
Strong capital inflows, according to the central bank, could reduce funding strains spurred by a larger current account deficit. It also stated that funding continued to be a major obstacle despite resilience of the banking sector.
The report noted that the assessment was set against a global context of geopolitical uncertainty, tighter financial conditions, and recurrent shocks. According to the RBI, as compared to other crises, the stress on the domestic financial sector was still comparatively mild.
It further highlighted that bank stress tests indicated that under the baseline scenario, scheduled commercial banks’ gross non-performing asset ratio might reach 1.9 per cent by March 2028.
Moreover, banks’ gross non-performing assets (NPA) ratio could increase to 3.8–4.1 per cent by March 2028 if macroeconomic conditions worsen.
Furthermore, “stress areas” in the non-bank financial industry were also highlighted in the report.
Under the baseline scenario, the RBI’s stress test for non-banking financial companies predicted gross non-performing assets (NPAs) at 2.8 per cent by March 2027. In the baseline scenario, the aggregate capital ratio of NBFCs was predicted to be 20.8 per cent by March 2027.
According to the RBI, 15 NBFCs might not meet capital standards under a severe credit stress test.
In certain areas of the mutual fund business, the central bank also reported liquidity violations. According to the report, certain mutual funds in debt schemes fell short of minimal liquidity standards in March, but the violations were promptly fixed.
