The Reserve Bank of India's (RBI) stress test shows that banking asset quality could worsen to 5.6% in case a sharp slowdown in key global economies spills over through trade and financial channels. The tests show that the aggregate capital adequacy ratio of 46 major banks may dip to 14.2% in case of heightened geopolitical risks from 17.2% in March 2025, but none of the banks will fall short of the 9% regulatory minimum requirement under adverse scenarios.
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