Economic momentum powers stability amid global risks: RBI

GROWTH HOLDS FIRM | Domestic strength cushions mkts against turbulence 

Agencies

New Delhi

India's financial system remains resilient and well-capitalised despite persistent global uncertainties, the Reserve Bank of India (RBI) said in the June 2026 edition of its Financial Stability Report (FSR). The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council on risks to financial stability.

The RBI said global markets have largely absorbed recent shocks. "Despite repeated shocks, the global financial system has thus far demonstrated notable resilience, with markets remaining orderly after an initial bout of volatility following the outbreak of the West Asia conflict," the report said.

However, the central bank warned that risks have not eased. "Nevertheless, global financial stability risks remain elevated," the RBI said. It noted that persistent supply chain uncertainties could tighten financial conditions and revive inflation, while elevated public debt, bond market fragilities, stretched asset valuations, and leveraged non-banking financial institutions (NBFIs) remain key vulnerabilities.

Household debt climbs to 45.5% of GDP in Sep 2025

The overall debt of the household sector reached 45.5% of the country's GDP due to an uptick in non-housing retail loans, according to the RBI's latest FSR. The RBI said the increase in household sector debt was due to rising non-housing retail loans, which constituted 58.4% of total borrowings as of March 2026. Their share has increased steadily over time, consistently outpacing housing loans, agriculture and business loans.

RBI flags emerging fault lines in private credit mkt

The RBI on Tuesday flagged emerging stress in the rapidly expanding private credit market, citing rising defaults and an increase in redemption requests while stressing that continued monitoring is essential to prevent broader financial system risks.

Gold import growth down substantially in May

The RBI on Tuesday said that the growth in gold imports "decelerated substantially" in May, which had witnessed multiple appeals by PM Modi to reduce consumption of the precious metal.  "Growth in gold imports, however, has decelerated substantially in May 2026 compared to 

the preceding month," the RBI said.

Economy remains exposed to energy price shocks

Exchange rate volatility may rise if oil prices increase due to the delayed normalisation of supply chain disruptions and additional demand to replenish inventory, an RBI report said on Tuesday.