RBI Notes Strong Domestic Demand and Stability Amid Global Risks

India’s Financial Stability in a Volatile Global Context

The Reserve Bank of India (RBI) has reaffirmed the resilience of India’s financial system in its December 2025 Financial Stability Report. While global finance faces fragility due to high debt levels, evolving policy frameworks, and geopolitical risks, India’s economy continues to hold firm, supported by robust fundamentals and strong institutional frameworks.

Key Highlights:

• Resilient Economy: RBI Governor Sanjay Malhotra described India as a “bright spot” amid global uncertainty, driven by strong domestic demand and stable inflation.
• Stable Financial System: Banks, NBFCs, and insurers remain well-capitalized, with strong balance sheets and low market volatility.
• Supportive Conditions: Comfortable liquidity and easy financial conditions continue to aid credit flow and investment.
• Global Risks: Elevated public debt, trade disruptions, and geopolitical tensions pose challenges, but India’s prudent policies mitigate systemic risks.
• Future Outlook: The RBI emphasized vigilance, noting that while India is well-positioned, global fragility requires careful monitoring and adaptive strategies.

India’s ability to balance growth with stability underscores its role as a key anchor in an uncertain global financial landscape.

Sources: Financial Express, CNBC TV18, Business Today