Current Economic Situation May Pose Some Challenges: RBI Governor Das To Banks
Reserve Bank Governor Shaktikanta Das said on Wednesday that the current economic conditions may pose certain challenges to banks, and urged them to be proactive in tackling them.
Speaking to heads of major state-run banks in Mumbai, Das noted there has been "improvement" in the banking sector and it remains "resilient".
The remarks come amid a slowdown in economic growth to a six-year-low at 4.5 percent for the September quarter. The RBI has also cut its growth estimate sharply to 5 percent for the fiscal year.
"Governor noted that there has been some improvement in banking sector and the sector remains resilient even though current economic conditions may pose certain challenges. He urged the banks to proactively tackle the emerging challenges swiftly, particularly with regard to the stressed assets resolution in a co-ordinated manner," an RBI release said.
Das also discussed transmission of monetary policy rates into the banks' lending rates for final borrowers. It can be noted that even though the RBI opted for a status quo at the policy review last week, its cuts of 1.35 percent during 2019 are yet to be passed on fully.
Flow of credit to productive sectors of the economy, including the non bank lenders and also small businesses segments was also discussed at the meeting, the RBI said.
Outlook on resolution of stressed assets and recovery from loans already classified as non-performing assets also featured in the parleys.
The meeting also discussed progress on deepening digital payments through focused outreach activities by banks to make certain districts in each State or union territory digitally enabled.