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      Question

      What is a primary source of near-term risk for the

      Indian financial system as stated in the RBI’s December 2025 report?
      A Domestic political instability Correct Answer Incorrect Answer
      B External uncertainties, especially geopolitical tensions Correct Answer Incorrect Answer
      C Declining asset quality Correct Answer Incorrect Answer
      D High market volatility Correct Answer Incorrect Answer
      E Weak capital buffers Correct Answer Incorrect Answer

      Solution

      The report identifies that near-term risks to the domestic financial system primarily stem from external uncertainties, notably geopolitical tensions and global trade-related disruptions, rather than domestic weaknesses.

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