Current Context: RBI Governor Shaktikanta Das addressed the 7th SBI Banking & Economics Conclave.
- In the conclave, the governor delivered various policy measures taken in order to deal with the economic crisis being faced by the country amidst COVID-19 lockdown.
- The RBI Governor claimed that Repo points cut by 135 points between February 2019 and the onset of the pandemic.
- The overall capital adequacy ratio for scheduled commercial banks (SCBs) stood at 14.8% as in March 2020, compared to 14.3% in March 2019. The CRAR of PSBs had improved from 12.2% in March 2019 to 13.0 per cent in March 2020.
- The gross NPA ratio and net NPA ratio of SCBs stood at 8.3 % and 2.9% in March 2020, compared to 9.1% and 3.7% as of March 2019, respectively.
- The Provision Coverage Ratio (PCR) improved from 60.5% in March 2019 to 65.4% in March 2020, indicating higher resiliency in terms of risk absorption capacity.
- The profitability of SCBs had also improved during the year. The gross and net NPAs of NBFCs stood at 6.4% and 3.2% as on March 31, 2020, as against 6.1 % and 3.3% as on March 31, 2019. Their CRAR declined marginally from 20.1 % to 19.6 % during 2019-20.
- RBI Governor further claimed that the coronavirus pandemic has represented our economic and financial system’s largest test of resilience and robustness. The new RBI initiatives seek to accelerate a cyclical turnaround in economic activity at a time when COVID-19 has struck the world along with other calamities, causing poverty and endangering thousands of people's lives and livelihoods. According to Governor, COVID may result in higher non-performing assets (NPAs) and capital erosion of banks.
- Static Part:
- HQ of RBI: Mumbai
