RBI vigilant of industry needs, says Governor Shaktikanta Das ahead of MPC meet

Ahead of the monetary policy review next week, the Reserve Bank of India Governor Shaktikanta Das on Monday said the central bank is vigilant of the needs of the industry and ready to take action as and when warranted, a remark, which may indicate one more policy rate cut in the upcoming review on August 6.

“RBI remains extremely vigilant, does not hesitate to take steps as and when required,” Das assured industry while addressing CII members.

The Governor, however, said that stability of financial sector entities was important and drew the attention towards growing infrastructure loans of the banks.

“The health of lenders is important. Banks’ infra sector NPAs remain elevated and the need is to diversify funding options for the infrastructure sector,” Das said.

India needs $4.5 trillion investment in infra sector by 2030.

He said Covid-19 has hit India in a period of growth moderation and the ensuing disruptions in demand conditions but of late signs of a gradual recovery from the nationwide lockdown are becoming visible.

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While he saw fortunes shifting in favour of the rural economy in the midst of Covid-19, India’s share in global value chain continued to be laggard.

He said that India can leverage the growing shifts in global value chains and increase its share in them. He said that the conclusion of bilateral trade deals with the US, EU and UK can bolster India's position in global value chains.

To a suggestion from HDFC Head Deepak Parekh about loan moratoriums hurting small businesses and therefore it should not be extended anymore, Das said he has noted the suggestion.