Speaking at the launch of the book ‘Portraits of Power: Half a Century of Being at Ringside’, written by former bureaucrat and current chairman of the finance commission N K Singh, Das said: “We are almost at the doorstep of revival process and it’s very important that the financial entities have adequate capital (to support growth).”
Expressing confidence that the policymakers will be able to overcome challenges caused due to Covid, Das said that government will have to spell out a fiscal roadmap post-Covid.
“I think post Covid, once there is containment of pandemic, the government will certainly have to spell out a fiscal roadmap that India should adopt,” he noted.
The RBI governor also emphasised on the need to build capital buffer for banks and non-banking financial companies (NBFCs) to deal with stress caused by the pandemic.
Asked if there is symmetry between the fiscal and monetary policy, Das said both are in an accommodative stance.
“Both fiscal and monetary policy were counter-cyclical and accommodative and both were working in close symmetry,” he said, while stating that the fiscal measures taken by the government to deal with the pandemic have so far have been well calibrated and prudent.
Das said as soon as the Covid-19 pandemic set in, the RBI asked all the banks and NBFCs to undertake stress tests internally.
“Related to the stress tests, I myself appealed and I have myself interacted with the banks and NBFCs and we have impressed upon them the need to build up proactively capital buffers and adequately capitalise their financial entities…,” he said.
“The government has undertaken several measures in very, very prudent and well calibrated measure in the context of the pandemic. First, to provide financial support to the vulnerable sections of the society and then provide certain kinds of relief to the other segments like industry and business,” he added.
With regard to reforms in the banking sector, he said the issue of governance in banks, NBFCs and financial institutions became very important post the global financial meltdown.
“Banks which have robust governance practices, robust internal controls systems, robust risk assessment and which do not undertake smart accounting, if I can put that way, I think those banks are the ones which are never over-leveraged, they always survive. Not only survive, they grow in every crisis…governance reforms is ownership agnostic,” Das emphasised.
In its monetary policy meet earlier this month, Das had stated that the Indian economy is entering into a decisive phase in fight against coronavirus and contraction in Q1 economic growth is behind us.
(With PTI inputs)Watch India at doorstep of revival process, says RBI governor Shaktikanta Das
