RBI Reports Moderate Rise in Bad Loans, Flags AI-Related Financial Risks
The Reserve Bank of India's June 2026 Financial Stability Report highlights a modest rise in bad loans for banks and non-banking financial companies (NBFCs) by 2027-28, with banks projected to see gross non-performing assets (GNPA) increase to 1.9% and NBFCs facing higher stress and shrinking capital buffers. Despite these challenges, both sectors maintain strong capital and profitability, supporting resilience. The RBI also identifies AI-enabled cyberattacks and elevated AI stock valuations as emerging financial stability risks, urging enhanced cybersecurity and caution amid global market uncertainties.