Signs Of Economic Recovery Visible, Says RBI Governor. Asks Banks To Be Investment-Ready

Addressing his first banking function since the pandemic begin in March 2020, Das said that economic recovery is now taking hold after the beating it has taken during the pandemic.

RBI Governor Shaktikanta Das. (File Photo/ Getty)

New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday said that signs of economic recovery in the country are visible as numerous macro indicators are showing positive growth and the economy has the potential to grow at a reasonably high pace in the post-pandemic scenario.

Addressing his first banking function since the pandemic begin in March 2020, Das said that economic recovery is now taking hold after the beating it has taken during the pandemic.

However, he also pointed out the need to resume private capital investment for economic growth to be sustainable and reach its potential.

Due to the unprecedented Covid pandemic and lockdown imposed, several nations have downgraded their economic growth forecasts between 8.5 to 10 per cent for 2020-21 fiscal, however, RBI did not change its forecast and claimed to grow at 9.5 per cent.

Das also asked banks to be investment-ready when the investment cycle picks up, which the RBI feels to begin from the next fiscal. He also asked banks to improve their capital management process.

Private capital has been missing from the economy since 2013 and many are of the view that this should begin from mid-next fiscal. 

Further taking solace in the fast-improving balance sheets of banks, the RBI Governor said gross bad loans of banks have come down in the September quarter from the previous quarter.

Further in his speech, Das also landed the tech entrepreneurs of the country and said that India has emerged as a top performer in the startup landscape, attracting billions of foreign capital.

In his monthly bulletin of November, the Centre bank too said that the indicators of aggregate demand have shown a brighter than before near-term outlook. 

In terms of financial conditions, RBI pointe out that system liquidity remained in large surplus, though average daily net absorption under the liquidity adjustment facility (LAF) moderated from Rs 8.1 lakh crore in the first half to Rs 7.5 lakh crore in the second half of October through November (up to November 10).