RBI Governor Shaktikanta Das has expressed concern over this in the annual report of the Reserve Bank of India. Shaktikanta Das warned that the financial sector is growing but the economy is not supporting it, which is not good for the future.
The country’s GDP figures disappointed on Monday due to Corona. The country’s GDP growth was recorded at -7.5 percent, which is the biggest decline since 1979 on an annual basis. Just a day after this, the country’s largest state-run bank SBI also expressed concern about the economy. In fact, there are many such indicators including GDP growth, the country’s financial deficit, slow pace of the construction sector, whose figures have come negative. According to the latest CMIE report, about 1 crore people have lost their jobs due to the second wave of corona. The condition of many industries including tourism is bad, but if we talk about the profits of the March quarter results of the big banks of the country, then there has been a strong jump in it. The question here is that when the economy and the banking sector are complementary to each other, then why such a difference in the figures of both. On the other hand, if we talk about the market, then there is a bullish trend in the market. In such a situation, the question is that when the economy is falling, why is the market and the bank making profits.
Actually, banks gave the benefit of moratorium to the people in Corona last year. At the same time, the government has also made many such efforts in the last one and a half years so that the liquidity remains in the market. On several occasions, RBI Governor Shaktikanta Das also asked to increase liquidity in the market. So that the condition of banks can improve. At the same time, steps like the Emergency Guarantee Scheme for SMEs taken by the government and the Reserve Bank of India will reduce the pressure on banks.
what the experts say
The country’s chief economist Arun Kumar told TV9 , that one RBI governor Shaktikanta Das himself has expressed concern over the annual report of the Reserve Bank of India. Shaktikanta Das warned that the financial sector is growing but the economy is not supporting it, which is not good for the future. According to economist Arun Kumar, banks have not disclosed their NPAs since last year’s moratorium, so the quarterly results of banks have been excellent. On the other hand, people are withdrawing money from other sources and putting it in the market. Due to which the market is also showing great growth. A big reason for the boom of banks is also that the lending rate of banks which are giving interest to people on fixed deposits is decreasing. According to Arun Kumar, the banks had a surplus account of Rs 8 lakh crore, while the government is also constantly making efforts to increase the liquidity of the banks. Although this is a matter of concern for the future as the economy figures are continuously falling and the banks have enough liquidity but now it is a matter of concern where the bank will spend that liquidity. Because due to the lockdown, the demand is equal to the end, while the consumer confidence has fallen. Due to which the major indicators of the economy are declining.
Meaning of RBI’s announcement of 50000 thousand crores
Just last month, RBI Governor Shaktikanta Das has announced liquidity of Rs 50,000 crore for healthcare infrastructure and services to increase liquidity in the market. After this announcement, RBI also announced Loan Restructuring 2.0. Actually, the second wave of Corona has had a bad effect on the economy of the country. The eyes of the RBI are constantly on this, in such a situation, it is the constant effort of the RBI that the banks should have enough capital so that the economy gets the benefit of the improving balance seat of the banks.
What do rating agencies report say?
More recently, there was a report by global rating agency Stated & Poor’s in which it was said that the efforts made by the Modi government to save Indian banks from the effects of Corona crisis have been successful to a great extent. According to rating agency S&P, due to the improvement in the conditions of India’s macroeconomy, the country’s banking system will see further improvement in the coming times. At the same time, India Ratings and Research in one of its reports had stabilized the rating of the banking sector from negative which was for a long period.
What is the current situation of banks
The financial position of any bank is assessed by its quarterly results. If we talk about the March quarter results, then the performance of the 3 largest banks of the country has been excellent. The country’s largest public sector bank SBI has achieved a profit of 80 percent. At the same time, the growth of two big private banks of the country has also been spectacular. Apart from this, the government is also continuously working on strengthening the position of banks through mergers and mergers.
How is the market performing
Corona has had an effect not only in India but on the whole world. The market is also considered an important indicator of the economy. If we talk about the important markets of the whole world, then India’s performance since December last year should not be called disappointing. From December 2020 to May 26, 2021, the growth percentage of the Indian equity market has been 6.8 per cent.
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