FSR is a half-yearly publication with contributions from all financial sector regulators.

Moderating inflation, improving external position, continuing fiscal consolidation and a strong and stable financial system with fortified balance sheets are hallmarks of this transformation in the post-pandemic period, it noted.

Bolstered by strong capital buffers and robust earnings, financial institutions are supporting durable credit growth. At the same time, higher profits and lower leverage are contributing to sound corporate financials, it said.

Proactive and prudent policy actions and availability of policy buffers are steering the economy on a rising growth trajectory with stability, the report observed.

Domestic regulatory initiatives, conditioned by the fast-changing macro-financial environment, are aimed at improving the robustness and resilience of the financial system.

A systemic risk survey carried out in November this year showed that risk perceptions have either receded or remained unchanged across major categories of risk, except macroeconomic risks.

Respondents cited tightening of global financial conditions and increase in commodity prices, particularly crude oil, as a key global risk.

Fibre2Fashion News Desk (DS)