Our banking system is designed to be resilient and stable, weathering economic cycles and absorbing shocks from the external environment. Our banking system has strong capital and liquidity buffers, and a range of prudential and macroprudential measures to ensure its stability. The Reserve Bank of India (RBI) has also taken a number of steps to enhance the resilience of the banking sector such as strengthening credit risk management, enhancing provisioning norms and ensuring timely capital infusion into banks.
The RBI has also put in place a range of measures to enhance the resilience of our banking system such as strengthening banking supervision, introducing prompt corrective action framework and strengthening risk management systems.
The Government has also taken measures to strengthen the financial health of the banking sector by recapitalizing public sector banks and bringing in reforms in public sector banking. These measures have enhanced the banking system’s resilience and stability and have enabled it to better weather economic cycles and external shocks.