India FSAP 2025: World Bank-IMF Financial Sector Review
Why in the news
A joint FSAP review described a stronger Indian financial system and listed reforms to keep growth going.
Key facts
- System judged resilient, diversified and inclusive; stress tests broadly reassuring.
- State role still large; trimming SOFI presence and ending exemptions for state-owned NBFCs may draw private capital.
- Large NBFCs’ energy-sector exposure could spill over to banks and bond markets.
| Area | Suggestion |
|---|---|
| Macroprudential | Borrower-based measures, DSTI, CCyBs |
| Governance | Clarify supervisory safety versus investor protection |
| Coordination | Conglomerate, cyber and climate risks |
| Bonds | RBI to accept corporate bonds with haircuts in crisis facilities |
Exam angle
- SOFIs include public banks, DFIs, RRBs, NBFCs and public insurers.