Financial Sector Assessment Programme for India

The Report of the Financial Sector Assessment Programme for India by the International Monetary Fund (IMF) makes the following recommendations:

  • The level of non-performing loans in India remains high and the IMF has favoured bolstering the level of capitalisation of some banks, particularly government-owned banks.
  • Together with capitalisation, the report asks for resolution and the recognition of Non-performing loans as part of the process of cleaning up the banking system of non-performing loans,

The report notes that there were some steps that were taken by the authorities to boost capital buffers in banks and also to improve governance in state-owned banks that have had some positive impact.

Financial Sector Assessment Programme

The FSAP includes two major components: a financial stability assessment, which is the responsibility of the IMF, and a financial development assessment, the responsibility of the World Bank.

Financial Sector Assessment Programme of the IMF aims to:

  • To gauge the stability and soundness of the financial sector.
  • To assess its potential contribution to growth and development.

The Financial Sector Assessment Program (FSAP) is a comprehensive and in-depth analysis of a country’s financial sector.

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