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Guwahati: RBI Governor Shaktikanta Das on Saturday said that the Indian economy has started showing signs of returning to normalcy in response to the easing of lockdown restrictions in the country.
Delivering the keynote address at the 7th SBI Banking and Economics Conclave, he said, "The Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions." He added that post containment of COVID-19, a very careful trajectory has to be followed in the orderly unwinding of countercyclical regulatory measures.
Though he sounded happy with the multi-prolonged approach adopted by the RBI that acted as a cushion to the immediate impacts of the pandemic on banks, he seemed concerned about the medium-term outlook. "Policy action in medium-term would require a careful assessment of how the crisis unfolds", Das said.
"The topmost priority for the RBI is growth; financial stability is equally important," Das was quoted as saying by news agency PTI.
Highlighting the efforts of RBI in this regard, Das added, "The RBI has taken several measures to protect our financial system, and support the economy in the current crisis." He also assured that the financial and banking system in the country is capable of meeting with posed challenges.
Encouraging banks to be prepared "all the time", he advised, "Building buffers and raising capital is crucial to ensure credit flows and build resilience in the financial system."
In the conclave, he also cautioned that the pandemic would lead to more NPA's and capital erosion.
RBI's optimistic remark comes days after Prime Minister Narendra Modi stated that "green shoots of recovery" were visible in the country's economy.