Reserve Bank of India governor Shaktikanta Das said everything is not doomed and gloomy about the economy and companies should look at opportunities and stop being proponents of gloom and doom.
Reviving economic growth remains his top priority and urged bankers to pass on the interest rate cuts to borrowers at a faster pace.
He said more banks should come forward to link the repo linked loans so that monetary transmission is faster, which will further help in reviving the consumption in the economy.
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- Reviving economic growth remains his top priority and urged bankers to pass on the interest rate cuts to borrowers at a faster pace
- Banks should come forward to link the repo linked loans so that monetary transmission is faster
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While steps to reboot growth will continue to be discussed, stability of the financial sector must also be kept in focus, Das added. He also said that financial stability should be seen as the ability of the financial sector to facilitate efficient allocation of economic resources and assessing, managing and pricing risk appropriately. The RBI is monitoring the top 50 NBFCs and the regulator or the government will not let any NBFC fail, he added.
The six-member monetary policy committee (MPC) is giving growth the highest priority, Das said at a banking conference organised by FIBAC on Monday in Mumbai. “When I read the papers and watch the television channels, the mood does not appear to be sufficiently positive and optimistic. I understand that global challenges and difficulties are coming from external and domestic sources,” he said. “But I think one has to look at the opportunities, one has to maintain a positive sentiment…because the mood of doom and gloom is not going to help anyone. It’s neither going to help the banks, nor the business, nor the real economy,” Das told a gathering of bankers and financial heads at an annual banking summit in the city.
The governor’s comments come at a time when India is witnessing its slowest growth in the past five years with GDP growth of 5.8% in the fourth quarter of FY19.
"I think the sentiment is very important and please look at the opportunities ahead of us. We do realise that there are challenges and difficulties coming from the external and domestic sources but one has to look at the opportunities and capitalise on that," said Das. He added that he was not asking anyone to maintain a panglossian (foolishly optimistic) countenance. "I am not saying we maintain a panglossian countenance and smile away every difficulty," he said.
"Today we are all aware that there are challenges which the business community is dealing with in the real economy," Das said. "There are global headwinds emanating from issues like trade and geopolitical tension," he added. Policymakers, financial sector representatives and bankers were all concerned about how to revive activity in Asia's third-largest economy, said Das.
