Business
‘Be watchful’: RBI Governor Shaktikanta Das to PSU, private banks MD and CEOs amid fears of global slowdown
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Amid fears of recession and global economic slowdown, Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday held a meeting with the MD and CEOs of public sector banks and certain private sector banks and told them to be watchful of the evolving macroeconomic situation, including global spillovers.
The Governor acknowledged the crucial role played by the commercial banks in supporting economic growth throughout the turbulent times since the outbreak of the pandemic and the ongoing financial market turmoil. He said despite challenges, the Indian banking sector has remained resilient and continued to improve in various performance parameters.
Das, however, advised the banks to remain watchful of the evolving macroeconomic situation, including global spillovers, and take mitigating measures proactively so that the potential impact on their balance sheets is minimised and financial stability risks are contained, the RBI said in a statement.
The RBI Governor’s advice comes at a time when the advanced countries are facing economic headwinds with decades-high inflation and fears of recession hitting them in the next 12 months. Global financial institutions like World Bank and IMF have already predicted economic slowdown in countries like the US, UK, China, and others due to a combination of factors.
India too has been facing high inflation for the last 10 months and this has forced the central bank to increase rates. While India is comparatively better placed, the impact of recession in the advanced countries may have some impact on certain sectors like Information Technology.
Last month, SBI Chairman Dinesh Khara said that majorly, India is an inward-looking economy in terms of demand because a significant component of the GDP is essentially addressed to the domestic economy. So, from that point of view, he said the global recession will have an impact but it won’t be as pronounced.
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