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Journalism of Courage
In the wake of a slowdown in the Gross Domestic Product (GDP) growth, Reserve Bank of India (RBI) Governor Shanktikanta Das Thursday said sluggish economic growth “warrants greater cooperation” between fiscal and monetary policies of the central bank. The RBI maintained that the country’s financial system “remains stable” despite some recent “dislocation”.
In the Financial Stability Report, Das asked the state-run banks to focus on governance reforms, attract private capital and do away with being “overly dependent” on government funds. The RBI Governor also asked Non-Banking Financial Companies (NBFCs) to grow more prudentially with enhanced asset-liability management.
On the subject of non-performing assets (NPAs), the report noted that the NPA ratio has improved “sharply to 9.3 percent in March 2019” and that the NPA cycle has turned around.
RBI’s financial stability report came a couple of days after Deputy Governor Viral V Acharya, a strong votary of the central bank’s independence and seen as having differed with Governor Das on the inflation trajectory, growth prospects and policy rates, resigned from his post, a little over six months before his term was scheduled to end.
