INSUBCONTINENT EXCLUSIVE:
Thursday called for more cooperation between the government and the Reserve Bank to help boost the sagging growth engine and to ensure
A dip in consumption and private investment has exerted pressure on the fiscal math, the governor said in his foreword to the bi-annual
Financial Stability Report released this evening.Concerted efforts are required to revive private investment and the government needs to
continue with economic reforms, Mr Das said
On the positive side, Mr Das, who has delivered three consecutive rate cuts of 0.75 per cent this year bringing down the key repo rate to a
nine-year low of 5.75 per cent, said the lower inflation and the moderate outlook on the same can help alleviate the constraints to the
fiscal numbers."Overall, the situation warrants greater cooperation internationally as well as monetary and fiscal coordination domestically
to ensure systemic stability," Mr Das said.He said companies in the crisis-hit non-banking finance companies need to develop on "prudent
lines" and focus on asset liability management
The shadow banks also need to focus on their strengths, by harnessing their expertise that has helped them grow, he said."The Reserve Bank
is reinforcing the regulatory and supervisory framework to help them better adapt to the evolving scenario," he said.It can be noted that
the asset liability mismatches,wherein the NBFCs borrowed short term to create long-term assets, was blamed as the primary reason for the
pains in the segment that started with the crisis at infra lender IL-FS last September.Mr Das said there has been an improvement in the
performance of the state-run lenders due to recapitalisation with both provision coverage ratios and capital buffers showing an uptick.But
he underlined the need for PSBs to be "specially focusing" on governance reforms and strengthening their balance sheets
"The proof of the pudding lies in the public sector banks' ability to attract private capital through market discipline rather than being
overly dependent on the government for capital," he said.Get Breaking news, live coverage, and Latest News from India and around the world
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