Srinagar, June 14: The Reserve Bank of India in its Financial Stability Report (FSR) has said the banking sector in India remains well capitalized with both core capital adequacy and leverage ratios at comfortable level. The report which was presented today in New Delhi makes assessment of the health of India’s financial sector. The report, the central bank in its website says, reflects its continuing endeavour to communicate its assessment of the incipient risks to financial sector stability. Pertinently, the first FSR was released in March 2010 and the second in December 2010. It said the FSRs will be released bi-annually in June and December every year. “The FSR holistically assesses, from a systemic risk perspective, disparate elements of the financial sector eco-structure – the macroeconomic setting, policies, markets, institutions,” it says. “However, the tools and techniques used to assess the stability of the financial sector, the build up of systemic risks, if any, and the movements of various vulnerabilities between December 2010 and June 2011, have been considerably upgraded,” it said. The report says that credit growth rebounded amid improvements in asset quality. Certain specific sectors, however, may pose concerns, going forward. “Increased reliance of market borrowings could adversely affect the liquidity position of banks,” it said, adding that the robust growth in credit warrants tightening of individual underwriting standards to prevent slippages when credit growth slows. The FSR states that the Indian financial system remains stable in the face of some fragilities being observed in the global macro-financial environment.
Greater Kashmir
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