Mumbai: Reserve Bank of India Governor Shaktikanta Das said on Saturday that Indian economy is showing signs of recovery.
Das, in a keynote address at the seventh SBI Banking and Economics Conclave, said the medium term outlook still remains uncertain.
“Despite the substantial impact of pandemic in our daily lives, the financial system of the country, including all the payment systems and financial markets, are functioning without any hindrance,” the RBI Governor said.
“The Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. It is, however, still uncertain when supply chains will be restored fully; how long will it take for demand conditions to normalise; and what kind of durable effects the pandemic will leave behind on our potential growth,” Das added.
The Governor explained that RBI’s multi-pronged approach has provided a cushion from COVID-19 pandemic’s immediate impact.
“Policy action for the medium-term would require a careful assessment of how the crisis unfolds. Building buffers and raising capital will be crucial not only to ensure credit flow but also to build resilience in the financial system.”
The Reserve Bank has advised the financial institutions to do a COVID stress test to detect weaknesses in their balance sheet, according to Das.
