Reserve Bank of India (RBI) Governor Shaktikanta Das has called for co-ordination among banks for resolving stressed assets in the banking sector, at a meeting of public sector bank CEOs on Wednesday.
He noted that there has been some improvement in the banking sector and that the sector remains resilient.
However, he said, the current economic conditions could pose certain challenges. “In his opening remarks, the Governor noted that there has been some improvement in banking sector and the sector remains resilient even though current economic conditions may pose certain challenges,” RBI said in a statement.
“He urged the banks to proactively tackle emerging challenges swiftly, particularly with regard to the stressed assets resolution in a co-ordinated manner,” the RBI added in the statement.
Transmission of monetary policy rates were also discussed at the meeting.
Rate transmission
Last week, the RBI, while keeping the policy rate unchanged, said one of the reasons behind the decision was inadequate transmission of monetary policy.
In response to a repo rate reduction of 135 basis points (bps) by the RBI since February, the one-year median marginal cost of funds-based lending rate (MCLR) had declined by only 49 bps.
Many banks, including State Bank of India and HDFC Bank, had lowered the MCLR this week.
The outlook on resolution of stressed assets and recovery from non-performing assets were also discussed.
The other issue was flow of credit to productive sectors, including MSMEs and NBFCs.
The Reserve Bank of India also reviewed the progress with regard to deepening digital payments through outreach activities planned by banks to make identified districts in each State/UT digitally-enabled, the statement added.
Published - December 11, 2019 10:14 pm IST
