Wednesday, Aug 10, 2022
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Less than 1 Crore Retail Investors Trade On NSE, Says RBI’s Financial Stability Report

Less than a crore monthly active users trade on NSE, says RBI in its 25th financial stability report. Till January 2022, both NSE and BSE showed upward growth in number of retail investors, before declining sharply again.

Less than 1 Crore Retail Investors Trade On NSE, Says RBI’s Financial Stability Reportundefined
Less than 1 Crore Retail Investors Trade On NSE, Says RBI’s Financial Stability ReportRBI RBI

Less than 1 crore monthly active users (MAUs) trade on the National Stock Exchange (NSE) of India, the Reserve Bank of India (RBI) has said in 25th Financial Stability report. 

The report also reflected the collective findings and implications of the sub-committee of the Financial Stability and Development Council (FSDC), adding that the observations were based on risks attached to financial stability and the “resilience of the financial system”.

Trend Of MAUs In NSE And BSE 

The report mentioned a chart that depicted the trend of retail investors on the Bombay Stock Exchange (BSE) and the NSE (National Stock Exchange) from January 2020 to May 2022. 

According to the report, till January 2022, both exchanges showed upward growth in terms of retail investors. While the NSE peaked at 1.2 crore MAUs, the BSE reported a peak at 40 lakh MAUs. After that, both exchanges showed a steep decline in the number of active investors. 

Nithin Kamath, founder and CEO of Zerodha Tweeted the same chart and remarked: “This is the first time I am seeing this data in public. MAUs <1 crore across India, much lesser than what most people expect. My guess is the dip will be a lot more by the end of June.” 

Key Highlights Of June 2022 FSR 

In addition to this, the RBI also published some key highlights of the June 2022 FSR. 

It said the global economy’s future course is marred by substantial uncertainty owing to the ongoing war in Europe, and regularisation of front-loaded monetary policy by the central banks, among others. This normalisation is in response to consistently high inflation and the COVID-19 pandemic. 

On a positive note though, despite challenges introduced by global conflicts, the Indian economy has continued to stride on the path to recovery. However, the country needs to carefully handle and closely monitor external disturbances. These include inflationary pressures and geopolitical risks, it said. 

Another point of relief, the report said was that both banks and non-banking financial institutions have adequate capital buffers to counter shocks. The capital to risk-weighted assets ratio (CRAR) of all scheduled commercial banks (SCBs) increased to 16.7 per cent. As opposed to this, their gross non-performing assets (GNPAs) reported a 5.9 per cent fall in March 2022, it said. 

Lastly, several macro stress tests were conducted to evaluate the credit risk. These tests revealed that SCBs would be in a position to fulfil minimum capital requirements, even when faced with high-magnitude stress scenarios.