RBI Annual Report 2020
The Federal Reserve Bank of India (RBI) released its Annual Report for FY 2019-2020. This report some concerning factors of the economy. that's a slowdown within the Indian economy might be cyclical with deep problems and requires urgent reforms.
Moratoriums on loan instalments, deferment of interest payments and restructuring may have implications for the financial health of banks unless they're closely monitored a high-riskously used.
Indian banks got to shed high-risk aversion which is impeding the has growth to productive sectors.
Bank credit growth has slowed significantly in 2020 despite the RBI’s efforts to infuse a big amount of liquidity into the banking industry.
Frauds reported by banks of Rs.1,00,000 and above value have quite doubled in FY 2019-20. the number of such frauds has increased by 28% in volume.
Majority of those frauds are in loan portfolios of banks, both in terms of number and value. the general public sector banks accounted for many of those frauds (80%).
Suggestions Made by RBI
Targeted public investment funded by asset monetisation and privatisation of major ports may be a viable thanks to reviving the economy.
Goods and Services Tax (GST) Council sort of apex authorities are often found out in respect of land, labour and power to drive structural reforms and speedier implementation of infra projects.
Recapitalisation of public sector banks, this assumes significance because the minimum capital requirements, which are calibrated on the idea of historical loss events, may not suffice to soak up post-pandemic losses.