On RBI policy, he said that the action for medium-term will require a careful assessment of how the crisis unfolds. "
pandemic will result in high NPAs and capital erosion. Building buffers, raising capital crucial for ensuring credit flows and to build resilience in financial system," he said.
Talking about the economic impact of the pandemic, the governor said, "Repo rate was cut mainly to tackle the slowdown in growth which was visible at that time. The MPC has decided, as you would be aware, to cumulatively, cut the Policy repo rate by 115 basis points. So from February 2019 the total rate cut that RBI has undertaken is 250 basis points."
Indian economy has started showing signs of going back to normalcy after easing of restrictions, said Das. However, he stressed on the need for a structured mechanism with legal backing to deal with stressed assets.
The governor further said that the Indian economy has started showing signs of normalcy with ease in lockdown restrictions across the country. He added that post containment of Covid-19, a very careful trajectory has to be followed in the orderly unwinding of countercyclical regulatory measures.
In these challenging times, banks
have to improve their governance and sharpen their risk management, he said, noting that banks
will also have to raise capital in an anticipatory basis instead of waiting for a situation to arise.
Keynote address by RBI Governor in SBI Conclave https://t.co/7HQJBV1cKj
— ReserveBankOfIndia (@RBI) July 11, 2020