Mumbai, June 30 -- Scheduled commercial banks (SCBs) are well-positioned to withstand severe macroeconomic shocks, with their capital buffers expected to remain above regulatory minimums even under adverse scenarios, although prolonged geopolitical tensions could erode capital adequacy and push up bad loans, according to the Reserve Bank of India's June 2026 Financial Stability Report (FSR) released on Tuesday.

RBI's macro stress tests covered 46 major banks over two years, under a baseline scenario and two adverse scenarios involving prolonged geopolitical tensions, high energy prices, currency pressures, inflation and slower growth. The macro stress test results suggest the resilience of SCBs to macroeconomic shocks, the central bank s...