According to the RBI’s Financial Stability Report

Solution

The RBI’s Financial Stability Report identifies capital outflows, along with geopolitical tensions and global debt levels, as key near-term risks to India's financial stability. These risks could cause volatility in capital markets and exchange rates. Capital outflows refer to the movement of assets out of the country, which can weaken the domestic currency and pressure foreign exchange reserves. This can impact financial institutions and investment flows, making it a major concern for financial stability.