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ARTICLE · 09 JANUARY 2025

AKP Banking & Finance Digest- January 06, 2025

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The Reserve Bank of India ("RBI") released the financial stability report in December 2024, which indicates that loan growth for non-banking financial companies ("NBFCs")...

GlobalFinance and Banking
Anuroop Omkar
Anuroop Omkar

1. Regulatory Updates

1.1. India

1.1.1 RBI Releases the Financial Stability Report

The Reserve Bank of India ("RBI") released the financial stability report in December 2024, which indicates that loan growth for non-banking financial companies ("NBFCs") moderated to 6.5 per cent (six points five per cent) in the first half of the financial year 2024–25. The slowdown is linked to RBI's November 2023 increase in risk weights by 25 basis points for loans to NBFCs and certain consumer credit categories. Upper-layer NBFCs, with 63.8 per cent (sixty-three points eight per cent) of their loan portfolio in retail loans, faced higher impacts. Despite this, the sector maintained resilience, with a capital-to-risk-weighted assets ratio (CRAR) of 26.1 per cent (twenty-six point one per cent) as of September 2024, supported by a net interest margin of 5.1 per cent (five point one per cent) and a return on assets of 2.9 per cent (two point nine per cent). Gross

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