The RBI's June 2026 Financial Stability Report opens with a specific framing: geopolitical fragmentation and AI-driven disruption are reshaping the global financial system at the same time. Against that backdrop, the FSR's aggregate picture is reassuring. Banks and NBFCs are well-capitalised. Asset quality is at multi-decadal bests. Stress tests confirm system-level resilience. The FSR is the FSDC sub-committee's half-yearly assessment of emerging risks to financial stability

India imports approximately 87% of its crude oil. With the Middle East in prolonged conflict and crude above $100 per barrel, this dependence has moved from a background cost to an active pressure point. We discussed the pressures on India's current account in a previous issue. Policy responses to reduce this dependence have already been going on. India hit its E20 ethanol blending target 5 years ahead of schedule. EV sales crossed 2 million units in 2024. PM Surya Ghar is ta

Education lending was among the fastest-growing NBFC asset classes for two consecutive years. The thesis was legible: premium foreign universities, an IT employment pathway post-graduation, and overseas income supporting repayment. Three pressures are now compressing that thesis simultaneously. The origination data has already captured much of the impact while the asset quality data has not. The GNPA numbers look clean, but the reason is structural rather than reassuring. The

India's current account deficit has long been financed with relative ease. FDI absorbed a large part of it, and portfolio flows added a further cushion. In FY26, both have thinned to the point where that pattern no longer holds. Net FDI has shrunk sharply, and portfolio flows have turned negative for 2 consecutive fiscal years. The rupee breached 96 per dollar in May 2026. What matters most for NBFC leadership is where this feeds into operations. There are 3 specific transmis

Recently, the RBI has had quiet consultations with the US Federal Reserve and the Bank of England. The subject was not monetary policy. On April 23, the Finance Minister chaired a meeting with RBI officials, bank chiefs, and MeitY representatives. The agenda was to assess the risks posed by Anthropic's Claude Mythos, a frontier AI model able to find and exploit software vulnerabilities on its own. She described the threat as unprecedented. Key directives emerged from the mee