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India Macroeconomic Indices

1 Finance Macroeconomic Index

Index providing insights into India’s economic phases and growth outlook. The 1 Finance Macroeconomic Index determines the growth of the economy.

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Subindices

Comprehensive real-time indices tracking India’s economic trends and performance.

Services Sector Activity Index

Services Sector Activity Index

Tracks India’s services sector growth and employment trends.

Industrial Sector Performance Index

Industrial Sector Performance Index

Output and performance of industries involved in manufacturing, production, and related activities.

Agriculture Output Index

Agriculture Output Index

Monitors India’s agricultural production and growth.

Consumer Inflation Index

Consumer Inflation Index

Tracks and provides a timely insight into India’s CPI trends.

Equity Market Optimism Index

Equity Market Optimism Index

Gauge Indian equity market sentiments and investor confidence.

Global Economic Impact Index

Global Economic Impact Index

Assesses the impact of global influences on India.

Financial Sector Soundness Index

Financial Sector Soundness Index

Evaluates banking stability and financial health.

Interest Rate Outlook Index

Interest Rate Outlook Index

Monitors repo rate trends to understand economic phases and monetary policy stance.

Economic Indicators

Economic Indicators

A comprehensive snapshot of India’s key economic indicators, including sectoral performance, inflation, interest rates, equity market optimism, financial sector soundness and global impact metrics. This section offers contextual insights into the country’s economic health and trajectory, helping inform data-driven investment decisions.

India's Economic Dashboard

An overview of India's Economy

High-Frequency Economic Indicators

An extensive collection of high-frequency economic indicators

Services Sector ActivityIndustrial Sector PerformanceAgriculture OutputConsumer InflationEquity Market OptimismFinancial Sector SoundnessGlobal Economic ImpactInterest Rate OutlookOther HFIsKey Economic Indicators
Global Market P/E
Reports and Resources
Asset Allocator
1 Finance Macroeconomic Index

Subindices

Services Sector Activity IndexIndustrial Sector Performance IndexAgriculture Output IndexConsumer Inflation IndexEquity Market Optimism IndexGlobal Economic Impact IndexFinancial Sector Soundness IndexInterest Rate Outlook Index

Economic Indicators

India’s Economic DashboardHigh-Frequency Economic Indicators
Global Market P/E

Reports and Resources

BlogsMonthly UpdatesQuarterly UpdatesWhite PapersAnnual Reports
Asset Allocator
Subindices

Financial Sector Soundness Index

Financial Sector Soundness Index

Financial Sector Soundness Index

Current Phase

Transitory Slowdown

Index Value: 57.04

73% Success rate

Summary

A transitory slowdown typically indicates a low improvement in the stability of the financial sector, providing a less unfavourable regulatory and interest rate environment for borrowing and lending.

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Index Value
Index value with YoY Growth in GVA Financial Services
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Index Value (LHS)

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Current Phase

Transitory Slowdown

Index Value: 57.04

73% Success rate

Summary

A transitory slowdown typically indicates a low improvement in the stability of the financial sector, providing a less unfavourable regulatory and interest rate environment for borrowing and lending.

Financial Sector Soundness Index

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Showing: Index Value • Range: 10 Years

Index Value (LHS)

Last Updated: 30 Apr, 2026
Source:CMIE Economic Outlook, 1 Finance Research
Source: CMIE Economic Outlook, 1 Finance Research
Last Updated: 30 Apr, 2026
Source:CMIE Economic Outlook, 1 Finance Research
Source: CMIE Economic Outlook, 1 Finance Research

Overview

Recent Updates

  • Outstanding non‑food credit in the Indian banking system reached ₹213 lakh crore as of 31 March 2026, with year‑on‑year growth at 15.9%, up from about 14–15% in FY25.
  • Retail loans grew at 16.2% YoY, driven by a 123% YoY surge in gold loans; excluding gold loans, retail‑loan growth was about 12% YoY, with home loans growing at 11.5% YoY and other personal loans at 13% YoY.
  • Gross NPA ratio for scheduled commercial banks has fallen to about 2.1–2.2% of gross advances in March 2026, the lowest in recorded history, which strongly supports the soundness‑and‑stability leg of the index.
  • 10‑year G‑Sec yields trade near 6.8-7.0%, implying that corporate‑bond yields (AAA‑rated) are in the 7.2-7.5% band, while prime‑corporate loan rates hover around 8.7-9.2% depending on collateral and tenor.
  • Regulatory reforms, including new banking rules effective November 1, 2025, have enhanced transparency, customer protection, and governance in the financial ecosystem.

Near-term Outlook

  • The Financial Sector Soundness Index indicates continued strength in credit expansion, with overall bank credit growth expected in the 14-15% range in FY26, supported by economic growth and infrastructure financing needs.
  • With CPI set to cross 4% in April 2026 and the West Asia crisis keeping supply-side inflation risks tilted upward, the MPC is likely on extended hold at 5.25%.
  • With GNPA already near multi-decadal lows and a large part of the stock-cleanup complete, further material improvement is unlikely.
  • Liquidity conditions may stay moderately tight due to the gap between credit and deposit growth, keeping deposit rates elevated and supporting financial savings inflows.
  • Overall, the index points to a stable and well-capitalised financial system, capable of supporting the ongoing investment cycle, with strong credit transmission and limited systemic risks, though global financial volatility and retail credit quality remain key monitoring factors.

Description

What is the Financial Sector Soundness Index?

Financial Sector Soundness Index indicates the health of India’s financial system, encompassing borrowing costs, credit distribution across sectors, and business sentiment, which is essential for assessing investment activity, money supply, interest rate movement and credit demand in the economy.

What are its components?

Financial Sector Soundness Index covers diverse banking and financial parameters covering demand, borrowing costs, etc. We have assigned appropriate weights to each of these indicators, considering their impact in reflecting the financial stability in the Indian banking system.

The High Frequency Indicators (HFIs) include:

Aggregate Bank Deposits

Non-food Bank credit of SCBs: Industrial Sector

Non-food Bank credit of SCBs: Services Sector

Bank Nifty - PE Ratio

Broad Money (M3)

Cash Reserve Ratio (CRR)

Foreign Exchange Reserves

Foreign Portfolio Investments (FPIs) - Debt

Usability

How to use the Financial Sector Soundness Index for better financial decision-making?

The Financial Sector Soundness Index is an indispensable tool for financial advisors, offering a comprehensive snapshot of India's financial system's health. By incorporating metrics like borrowing costs, credit distribution across various sectors, the Financial Sector Soundness Index becomes a vital indicator for investment activity, money supply, and credit demand. Here’s how you can utilise this index to significantly enhance your financial planning and decision-making processes.

Insights

Economic Cycle Alignment: The index helps in aligning investment portfolios with the broader economic trends, ensuring that investments resonate with the current financial climate.

Interest Rate Insights: Financial Sector Soundness Index indicators on interest rates helps you make informed decisions on bond investments, where interest rate movements play a crucial role.

Interest Rate Forecasting: The index aids in predicting future interest rate movements, guiding on the optimal timing for taking loans or refinancing existing debts.

Credit Market Trends: Insights into credit distribution can help in understanding the lending atmosphere, allowing advisors to recommend when to seek loans or adjust credit strategies.

Inflation Expectations: The Financial Sector Soundness Index can provide clues about future inflation trends, allowing for better budgeting and savings strategies.

Healthcare and Education Costs: Trends in borrowing costs and credit distribution can indirectly signal changes in healthcare and education expenses, guiding insurance and savings decisions.

Retirement Planning: The Financial Sector Soundness Index insights into the overall economic health can assist in creating more robust, inflation-adjusted retirement plans.

Historical Events

Apr

2022

RBI Rate Hikes

The Reserve Bank of India (RBI) initiated an aggressive monetary tightening cycle between Apr- Dec 2022 to combat post-pandemic inflation. The Monetary Policy Committee (MPC) raised the repo rate by 225 basis points (bps) across five meetings, marking the steepest annual hike since 2018.

Mar

2020

COVID-19 Pandemic and Lockdown

The COVID-19 pandemic, a global health crisis caused by the novel coronavirus, began affecting India significantly from March 2020. Characterised by widespread infections, lockdowns, and public health emergencies, the pandemic has had profound implications on the Indian economy and society. According to the Ministry of Health and Family Welfare (MoHFW), COVID-19 caused 5,33,318 deaths as of December 19, 2023.

Sep

2018

DHFL Crisis

The crisis involving Dewan Housing Finance Corporation Ltd. (DHFL), one of India's largest Housing Finance Companies (HFCs), unfolded between 2019 and 2020. It marked a significant episode in the country's financial sector, particularly impacting the Non-Banking Financial Company (NBFC) and real estate sectors.

Sep

2018

IL&FS Crisis

The IL&FS (Infrastructure Leasing & Financial Services) Crisis of 2018 was a significant event in the Indian financial sector, marked by the company's default on several debt obligations. IL&FS, a major infrastructure development and finance company, was considered a systemically important NBFC in India, and played a critical role in India's infrastructure sector.

Jul

2017

Implementation of GST

On July 1, 2017, India underwent a major tax reform with the implementation of the Goods and Services Tax (GST), marking a significant milestone in the country's taxation history. GST was introduced as a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India, replacing multiple cascading taxes levied by the central and state governments.