Active users in Indian capital markets are less than 1 crore, Zerodha founder sounds the alarm

On June 30, Zerodha Founder and CEO, Nithin Kamath, commenting on the RBI Financial Stability Report 2022, said the number of Monthly Active Users (MAUs) in Indian Capital Markets was less than 1 crore in India, which is far less than most people expect.

Sharing his comments, the founder of the online stock trading platform took to Twitter and wrote, “Monthly Active Users (MAUs) in Indian Capital Markets from RBI Financial Stability Report 2022. This is the first time I’ve seen this data in public. MAU

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Earlier today, the Reserve Bank of India released its “Financial Stability Report” for June 2022. In the report, the apex bank cited the normalization of monetary policy in response to persistently high inflation that brings high volatility to global financial markets as reasons for uncertainty in the global economy. He also cited the war in Ukraine, high commodity prices, supply chain disruptions and gloomy growth prospects as other reasons.

Considering the case of India’s economy, RBI said: “High-frequency indicators point to a gradual but unevenly strengthened recovery in the first quarter of 2022-23, despite geopolitical headwinds, high commodity prices, particularly crude oil, and volatile financial conditions, as the global fallout works to destabilize domestic financial markets through bouts of turbulence.”

However, RBI mentioned that the Indian economy remains on the road to recovery, although inflationary pressures, external spillovers and geopolitical risks warrant careful management and close monitoring.

“Banks as well as non-banking financial institutions have sufficient capital buffers to withstand shocks,” says the half-yearly report.

Adding more details, the RBI report said: “The capital to risk-weighted assets ratio (CRAR) of regular commercial banks (SCBs) reached a new high of 16.7%, while their gross ratio Non-Performing Assets (GNPA) fell to six-year low of 5.9% in March 2022. Additionally, Urban Cooperative Banks (UCB) CRAR rose to 15.8% in March 2022 while that of the NBFCs was 26.9%.

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However, if the macroeconomic environment deteriorates to a medium or severe stress scenario, the GNPA ratio could rise to 6.2% and 8.3%, respectively, the RBI said.

The latest Systemic Risk Survey (SRS) conducted by the Reserve Bank in May 2022 shows that global fallout and financial market volatility have moved to the “high” risk category.

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