The Reserve Bank of India's December Financial Stability Report indicates the domestic financial system is resilient, with commercial banks in sound health. Strong capital and liquidity buffers, improved asset quality, and robust profitability are noted. Stress tests suggest banks can withstand adverse scenarios, with the gross non-performing assets (GNPA) ratio projected to fall to 1.9% by March 2027, down from 2.1% in September 2025, a multi-decade low.