New Delhi, Dec 31 (PTI) Indian economy is projected to register high growth, driven by strong domestic consumption and investment despite a volatile and unfavourable external environment, RBI Governor Sanjay Malhotra said on Wednesday.

"Maintaining financial stability and strengthening the financial system remains our north star," Malhotra said in his foreword in the latest edition of the RBI Financial Stability Report.

According to him, financial sector regulators recognise that financial stability is not an end in itself and promoting innovation and growth, protecting consumers, a pragmatic approach to regulation and supervision that improves financial system efficiency are equally important.

"The most important contribution the policymakers can make is to foster a financial system that is robust and resilient to shocks, efficient in providing financial services and promotes responsible innovation," he said.

Malhotra noted that the Indian economy and the financial system remain robust and resilient supported by strong growth, benign inflation, healthy balance sheets of financial and non-financial firms, sizeable buffers and prudent policy reforms.

"Despite a volatile and unfavourable external environment, the Indian economy is projected to register high growth, driven by strong domestic consumption and investment. Nonetheless, we recognise the near-term challenges from external spillovers and continue to build strong guardrails to safeguard the economy and the financial system from potential shocks," he said. PTI NKD TRB

Indian economy projected to sustain high growth despite external volatility; regulators stress financial stability and guarded innovation. The RBI foreword emphasises prioritising financial stability alongside promotion of innovation, consumer protection and regulatory efficiency through pragmatic supervision and policy reforms. It projects high economic growth driven by domestic consumption and investment despite an unfavourable external environment, citing healthy balance sheets, sizeable buffers, benign inflation and prudent reforms, and indicates continued strengthening of macroprudential guardrails to mitigate external spillovers and protect the financial system.