Indian economy is nearing revival from the COVID-19 pandemic, said Reserve Bank of India (RBI) Governor Shaktikanta Das, adding it is very important that the financial entities have adequate capital.
Das, speaking at the launch of the book ‘Portraits of Power: Half a Century of Being at Ringside’, written by a former bureaucrat and current chairman of the Finance Commission N K Singh, on Wednesday, said that banks and non-banking financial companies (NBFCs) should have adequate capital in today’s day and age when the country’s economy is at the brink of revival.
“As COVID-19 pandemic set in we had alerted and asked banks and NBFCs to undertake stress tests in the context of coronavirus. I had myself interacted with banks and NBFCs on the need to build up capital buffers proactively and adequately capitalise their financial entities, so that they not only strengthen their inherent resilience to tide over financial stress but also have adequate capital to support growth, to ensure credit flow is maintained,” Das said.
“We are today at the doorstep of revival process after and due to the effect of the pandemic and it is very important that financial entities have adequate capital and many of them have already raised the capital others, both in private and public sector, will do so in the coming years,” he added.
Apart from the RBI Governor, External Affairs Minister (EAM) S Jaishankar, along with others, participated in the launch of the book.
Das further said that banking and NBFCs need governance reforms in the present day.
“Reforms in the governance of banks and NBFCs is mostly important. Banks that have robust governance practices, internal control systems, risk assessment and do not undertake smart accounting are the ones that are never overleveraged. They not only survive but they grow in every crisis. It’s not just ownership, irrespective of ownership of banks, and governance reforms is ownership agnostic, and it is required,” he said.