The Reserve Bank of India (RBI) will ensure a strong and stable financial system that will act as a bedrock for the country’s economic progress, Governor Shaktikanta Das said, underscoring central bank’s efforts to shore up domestic resilience in a volatile global environment.
“Given the rapid changes taking place in today’s world, especially in the areas of technology, innovation, business practices and growing complexities in the financial sector, the Reserve Bank is constantly evaluating the emerging trends and taking necessary policy measures to remain in sync with the evolving situation,” Das said at the RBI’s 90th commemoration function here on Monday.
Referring to the “well-calibrated and co-ordinated” monetary and fiscal policies adopted amid the turmoil of the Covid-19 pandemic and various geo-political crises, Das said that it was a matter of satisfaction that India was experiencing robust GDP growth and moderating inflation while foreign exchange reserves were at an all-time high. The central bank head also emphasised India’s stable financial sector and resilient external sector.
“It (RBI) stands tall among its peers on several counts. A once-in-a-century pandemic, COVID, hit us. The RBI adopted, and in fact, deployed, a conventional and unconventional range of instruments to provide liquidity and to promote growth and to ensure financial stability,” Finance Minister Nirmala Sitharaman said at the event.
“In the past few years, India’s capacity to manage and also to take care of external imbalances and uncertainties have significantly improved purely because of the professional management of the RBI,” she said.
Recounting the RBI’s journey, Das said that the central bank had transitioned from being primarily concerned with allocation of scarce resources to an enabler for the market economy. He listed out several reforms, including the Insolvency and Bankruptcy Code and the adoption of flexible inflation targeting, which had bolstered the banking system and helped rein in consumer price pressures.
“A decade ago, (we had a) balance sheet problem, today (that) is a balance sheet advantage and that advantage accrues to our economy. Collaborative efforts of the government of India and RBI, the asset quality management, Prompt Corrective Action framework are all great functions, well carried out by our true regulator of the banks,” Sitharaman said.
