The consultations were aimed at evaluating conditions on the ground so authorities would not be caught off guard if the conflict deepens, the people said, asking not to be identified because the discussions are private. The central bank also sought feedback on whether temporary regulatory relief may be needed to prevent a deterioration in borrowers’ creditworthiness, they said.
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Oil above $100 a barrel is driving up costs across India’s economy and adding to pressure on inflation and household budgets. While non-performing loans in the banking sector remain at a multi-decade low, the consultations show authorities are closely monitoring for signs of financial stress.
Authorities are keen to prevent broader credit stress from hurting economic growth, the people said, adding that the discussions were not meant to signal immediate alarm. Rating firms have shared preliminary assessments with the RBI, outlining various credit-risk scenarios if the war persists, they said.
A spokesperson for the RBI did not reply to an email seeking comment. The central bank is scheduled to release its half-yearly Financial Stability Report next month.
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Rating agencies said that any fallout is expected to come mainly via higher input costs, supply-chain disruptions and weaker demand, the people said. To limit the impact, the government has raised fuel prices, curbed gold imports and tightened currency-market rules. In a rare public appeal this month, Prime Minister Narendra Modi urged citizens to avoid non-essential travel to conserve foreign exchange reserves.