Prime Minister Narendra Modi, speaking at an event marking the 90th anniversary of the Reserve Bank of India on Monday, commended the central bank for successfully reaching its targets and objectives.
During the event in Mumbai, Prime Minister Narendra Modi announced that the Indian banking system, which had previously suffered losses, has now turned a profit and experienced significant credit growth. He emphasized that India’s banking system is strong and sustainable on a global scale.
“In 2014, when I attended the programme for the completion of the RBI’s 80 years, the situation was very different. The entire banking sector in India was struggling with problems and challenges. Everyone was doubtful regarding the stability and future of India’s banking system.”
“The situation (then) was so bad that public-sector banks were not able to provide enough boost to the country’s economic progress. Today, India’s banking system is seen as strong and sustainable,” he said.
This achievement was made possible through an infusion of Rs 3.5 lakh crore to capitalize and improve the condition of public sector banks (PBS). The gross non-performing assets (NPAs) of banks have decreased from 11.25 percent in 2018 to 3 percent in September 2023, while credit growth has reached nearly 15 percent.
Modi also highlighted the crucial role played by the Insolvency and Bankruptcy Code (IBC) in resolving loans worth around Rs 3.25 lakh crore. Additionally, he mentioned the positive impact of Kisan Credit Cards in boosting the rural economy, while cooperative banks were recognized as an important segment under the Reserve Bank of India’s (RBI) supervision.
Finance Minister Nirmala Sitharaman also spoke at the event, emphasizing that the stability in government securities yields has contributed to the overall financial market resilience and increased investor confidence in the Indian economy. This positive outlook for the banking sector and overall financial stability bodes well for India’s economic growth and development.
- Modi emphasized the Indian banking system’s potential as a case study, attributing its transformation to a combination of clear policy, intent, and decisive decision-making. He underscored that the system’s evolution warrants in-depth analysis.
- Modi lauded the RBI for successfully meeting its targets and objectives, noting that Indian banks have become profitable with record credit growth. He highlighted the global recognition of India’s banking system as robust and stable, citing a significant reduction in gross NPAs from 11.25 percent in 2018 to 3 percent presently.
- PM Modi outlined India’s ambition to achieve economic self-reliance within the next decade to mitigate vulnerability to global factors, signaling a strategic shift towards greater autonomy in economic affairs.