Reserve Bank Governor Shaktikanta Das on Thursday said India is one of the fastest growing major economies in the world with a rising potential growth profile.
The Reserve Bank of India (RBI) remains alert and committed to act early and decisively to prevent any build-up of risks, said governor Shaktikanta Das. In his foreword to the 28th issue of the Financial Stability Report (FSR), the governor said that the health of the Indian financial system is steadily improving on the back of multi-year high earnings, low level of stressed assets, and strong capital and liquidity buffers with financial institutions.
“We remain alert and committed to act early and decisively to prevent any build-up of risks,” said Das. “Our recent macroprudential measures to curb lenders’ exuberance towards certain segments of retail loans underline our commitment to preserve financial stability without compromising availability of funds for productive requirements of the economy,” he added.
Noting that India is one of the fastest growing major economies in the world with a rising potential growth profile, he said that the sharp rebound in growth is underpinned by sound macroeconomic fundamentals, robust domestic demand and prudent public policies.
“Achieving durable price stability, ensuring medium-term debt sustainability, further strengthening financial sector resilience, creating new growth opportunities and promoting inclusive and green growth remain key policy priorities,” he added.
The bi-annual report noted that despite a challenging global backdrop, the Indian economy is exhibiting sustained momentum and resilience. The domestic financial system remains sound and is bolstered by the improving health of financial institutions.
Headline inflation, which peaked at 7.4% in July 2023 on the back of volatile food prices, is progressively aligning with the medium-term target of 4%. It has eased to 5.6 % in November 2023 but remains susceptible to food price shocks.
“Even as we confront global headwinds and emerging challenges from technological disruptions, cyber risks and climate change, our endeavour is to continue to fortify the financial system, promote responsible innovation and invigorate inclusive growth,” said the governor.
The central bank and the other financial regulators remain invested in preserving financial stability and fostering a financial system that is resilient to shocks and supportive of growth, he added.
Banks and NBFCs, bolstered by improved balance sheets, are catalysing economic growth and meeting the productive needs of the economy. Overall, domestic macro-financial risks have declined and proactive and prudent policies have improved macroeconomic resilience, noted the report.
Source:financialexpress.com