RBI trying to accelerate credit growth |
India`s apex bank, the Reserve Bank of India has been taking measures to arrest the economic slowdown in the Indian economy but according to the RBI Governor Shaktikanta Das, the slowing credit growth has been one of the most critical challenges for the banking industry and there is a need to focus on prudent lending by the banks. So far in 2020, credit growth in India has moderated to 7-7.5 percent. At an event, Das said, "The most critical challenge today for banks not just in India but also elsewhere is slowing credit offtake. It affects the profitability of banks." To facilitate the flow of credit, the RBI has taken several steps like reducing repo rate, facilitating bank refinance to NBFCs for lending to priority sector and providing long-term repo operation (LTRO), among others. With such measures already in place, banks need to focus on credit offtake and flow of credit. He said that "While doing all that the focus should be on doing prudent lending and also to improve the operational efficiency of the banks." He said the strength of a banking system depends on the strength of its corporate governance that fosters a robust and ethics-driven compliance culture.
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