PM Narendra Modi with (from left) Finance Minister Nirmala Sitharaman, Maharashtra Governor Ramesh Bais, and RBI Governor Shaktikanta Das at a ceremony marking 90 years of the RBI, in Mumbai on Monday Photo: PTI
With several new sectors coming up and creating newer opportunities for the country’s youth, the Reserve Bank of India (RBI) must explore out-of-the-box policies to ensure credit availability for these emerging fields, Prime Minister Narendra Modi said on Monday. He was speaking at a ceremony to mark the 90th year of the Indian central bank.
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Among those in attendance were Reliance Industries Chairman Mukesh Ambani, Mahindra Group Chairman Anand Mahindra, Tata Sons Chairman Natarajan Chandrasekaran, 16th Finance Commission Chairman Arvind Panagariya, former RBI Governor Urjit Patel, SBI Chairman Dinesh Khara, and CEOs of banks.
Modi commended the RBI for its efforts in revitalising financially distressed banks and transforming them into profitable institutions. “In 2014, when I attended the programme for the completion of the RBI’s 80 years, the situation was very different. The entire banking sector in India was struggling with problems and challenges. Everyone was doubtful regarding the stability and future of India’s banking system.”
The PM asserted that the banking sector’s profitability and the surge in credit growth were outcomes of collaborative efforts between his government and the RBI over the past decade. He also highlighted a remarkable decline in gross non-performing assets (NPAs) of public-sector banks — from 11.25 per cent in 2018 to under 3 per cent by September 2023.
On the once-prevalent ‘twin-balance sheet’ issue, Modi declared the problem resolved, with banks now witnessing robust credit growth of 15 per cent. He acknowledged the RBI’s substantial contribution to these achievements.
PM Modi emphasised the imperative of accelerating digital transactions over the next decade and underscored the importance of monitoring advances in the cashless economy. “We will have to grow digital transactions in the next 10 years. We will also have to keep an eye on the developments coming from the cashless economy… What happened in the past 10 years was just a trailer, still a lot is to be done to take the country much further,” he said.
Confident of another term, the PM, on a lighter note, told RBI officials that their work would increase on the very next day of his swearing-in. “I am busy with elections for the next 100 days. So, you have a lot of time to think about (new policies),” he said.
The country is gearing up for general elections, starting on April 19, in which the Modi-led Bharatiya Janata Party (BJP) will be vying for a third term in office. The election results are scheduled to be announced on June 4. Modi also mentioned more than 12 billion monthly transactions via Unified Payments Interface (UPI) making it a globally recognised platform. On the work being done on the Central Bank Digital Currency, he said the transformations of the past 10 years had enabled the creation of a new banking system, economy and currency experience.
In his speech, RBI Governor Shaktikanta Das said the well-calibrated and coordinated monetary and fiscal policies adopted in the country went a long way in shielding the economy from the shocks of Covid-19 pandemic and geopolitical hostilities and helped India emerge even stronger than before. “It is a matter of satisfaction that today our GDP growth is robust, inflation is moderating, the financial sector is stable, the external sector remains resilient, and the forex reserves are at an all-time high,” he said, adding the RBI had emerged as a symbol of stability, resilience and commitment to the welfare of the citizens.
“As we move towards RBI@100, the Reserve Bank remains focused on ensuring a stable and strong financial system that would act as bedrock for our country’s economic progress,” Das said.
Finance Minister Nirmala Sitharaman said the stability in government securities yields had bolstered overall financial market resilience and investor confidence in the Indian economy. She emphasised that the measures undertaken for monetary tightening had effectively stabilised the G-Sec yields. “The stability in the G-Sec market has contributed to overall financial market resilience and investors’ confidence in the Indian economy,” she said.
First Published: Apr 01 2024 | 4:08 PM IST
