Don't worry, banks have shock absorbers: RBI

The RBI's bi-annual Financial Stability Report said banks remain sound with strong capital and liquidity buffers, though gross NPAs could rise to 1.9% under the baseline scenario from 1.8% in March 2026 and to 3.8-4.1% under severe stress. Core equity capital could fall to 13.9% (baseline) or 11.6% (severe stress) versus 15.2% currently. The report flagged AI-enabled cyberattacks as the biggest near-term threat to the financial system and raised concerns over customer service in the insurance sector, where surrenders and withdrawals reached 38.3% of total pay-outs in 2025-26.