PM Modi to RBI: On Day 1 after swearing-in, lot of work coming your way

English | 02 April, 2024 | 10:08 AM
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PRIME MINISTER NARENDRA Modi Monday told the Reserve Bank of India to think of ways to support new emerging sectors such as space, green energy, digital technology and tourism in the coming days, because a lot of work will come its way once the new government takes oath.

“Abhi 100 din mai chunav mein busy hoon. Aap ke paas bharpoor samay hai. Aap soch ke rakhiye, kyonki shapath lene ke doosare din hee dhama dham kaam aane wala hai (I am busy in elections for the next 100 days. You have enough time in your hands to think. After taking oath, a lot of work will come your way,” Modi said addressing the 90th commemoration function of the Reserve Bank of India (RBI) on Monday.

“Entire world wants to come to India, wants to see India and understand India,” Modi said, highlighting the importance of tourism. The space sector too is now opening up with many new startups. “We need to see how we can meet their credit demand,” he said.

The Prime Minister also said there is a need to improve India’s economic self-reliance so that the country is shielded from any adverse event from around the world. “In next 10 years, we need to make India’s economy self-reliant. We have to make efforts to ensure that our economy is much less affected by the crisis from across the world,” he said.

With its contribution of 15 per cent to the global GDP growth, India has become the growth engine of the world. “In such cases, the effort should be that the rupee is more accessible and acceptable in the world,” he said.India is aiming to make the rupee a global currency. Last year, an RBI-appointed Inter-Departmental Group (IDG) had recommended a slew of measures, including inclusion of the rupee in the Special Drawing Rights (SDR) basket and recalibration of the foreign portfolio investor (FPI) regime to accelerate the pace of internationalisation of the rupee.

The Prime Minister praised the RBI for its efforts in improving the health of India’s banking sector and the economy. “In 2014, when I attended the RBI’s 80th birthday, the situation was very different. India’s banking sector was facing different challenges. Due to higher NPA levels (of banks), everyone had doubts about the banking sector’s stability and its future,” he said.

The situation was so bad that public sector banks were unable to provide the required push to the country’s economic growth, he said.

Modi said his government adopted the strategy of recognition, resolution and recapitalisation to improve the health of the banking sector. The government infused capital of Rs 3.5 lakh crore in public sector banks and undertook many reforms to strengthen their governance.

The Insolvency and Bankruptcy Code (IBC) alone has helped to resolve bad loans worth Rs 3.25 lakh crore. Over 27,000 applications with an underline default of over Rs 9 lakh crore, were resolved before admitting to the IBC, he said.

The gross NPAs (non-performing assets) of banks, which were at around 11.25 per cent in 2018, has dropped to below 3 per cent at the end of September 2023.

The twin balance sheet issue is now history, he said. “The banking system, which at some point of time was on the verge of collapsing, has become profitable and is showing higher growth in credit,” he said.

He said the transformation of the banking sector in the last 10 years was difficult but it could be achieved because there was clarity in the government’s policies, intentions and decisions. It was also possible as the government made concerted efforts, and with honesty.

“…if intentions are correct, policies are right. If policies are correct, decisions are right, and when decisions are right, the outcome will also be right,” Modi noted.

He highlighted that there are 52 Jan Dhan accounts today, with more than 55 per cent accounts belonging to women and over 7 crore Kisan Credit Cards have been given to farmers, fisherman and others, which has given a push to the rural economy.

Talking about Unified Payments Interface (UPI), the real-time payment system, Modi said it has become a globally recognised platform with more than 1,200 crore transactions taking place per month. The RBI is also working on the Central Bank Digital Currency (CBDC).

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