IMF-World Bank FSAP Report on India’s Financial System
Why in the news
The IMF released a joint IMF-World Bank review of India’s financial sector, praising reforms but naming new risks.
Key facts
- FSAP: Financial System Assessment Program, a joint IMF and World Bank exercise.
- NBFCs: better capitalised, with moderate sustainable lending; scale-based regulation and liquidity coverage rules helped.
- Digital public infrastructure: UPI, Aadhaar, DigiLocker boosted inclusion.
- Insurance: stable and well regulated.
Concerns and advice
| Area | Advice |
|---|---|
| Legal and tax | Strong legal reforms, consistent tax structure |
| Climate risk | Climate guidelines for insurers and banks |
| Cyber risk | Stronger cyber-resilience |
| Digital access | Wider outreach, equitable access |
Exam angle
- FSAP is by IMF and World Bank; related: scale-based regulation, financial inclusion.