The Tatva

Latest News, India News, World News, Politics, Analysis, Sports, Opinions and much more.

‘Haven’t exhausted our ammunition against COVID-19’: RBI Governor Shaktikanta Das assures “everything is planned”

Highlighting the role of RBI in the current scenarios, RBI governor has said that India won’t be entering severe recession like other countries as “very calibrated and cautious plan” is being acted upon.
RBI Governor Shaktikanta Das [Image – Reuters]

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that the country’s banking system “continues to be sound and stable” during the covonavirus pandemic.

“We have not exhausted our ammunition, whether on rate cuts or other policy actions,” Das said. He added that being overly risk-averse is self-defeating for banks.

Das said that after the pandemic is contained, a careful trajectory needs to be followed for unwinding. He hoped that the financial sector will return to normalcy.

“By no sense should it be assumed that RBI will unwind the measures soon,” the central bank’s governor clarified.

“Once there is clarity on Covid-19 curve and other aspects, the RBI will start giving its estimates on inflation and growth,” said Das.

The RBI Governor was speaking at an event organized by Business Standard.

Das further added, “While the moratorium on loans was a temporary solution in the context of lockdown, resolution framework is expected to give a durable relief to borrowers facing COVID19 related stress”

“Measures taken by the RBI are intended to deal with the specific situation of COVID19 and can not be, obviously permanent,” said Das.

Das said there is a scope for banks to improve their ability to avert frauds from happening and added that their risk frameworks should be able to smell vulnerabilities.

India’s retail inflation accelerated to 6.93% in July from 6.23% in June, remaining above the MPC’s target range of 2-6%, while food inflation rose to 9.62%. 

Debt-to-Gross Domestic Product (GDP) ratio, fiscal deficit and current account deficit were under “much better control this time,” Das said, adding that bond yields shot up only in last couple of weeks.

The RBI Governor expressed “deep appreciation” for officers and staff of the banks who “helped maintain operational continuity” during the lockdown. “Must compliment banks for maintaining operational continuity despite challenging times,” he said.

Appreciating the work done by the government in response to the crisis, Das termed it as fiscally responsible, prudent and well calibrated.