BusinessFEATUREDLatestNewsTOP NEWS STORIESTOP STORIES

Omicron Is A Threat To Recovery, RBI’s Direct Warning

Omicron is a threat to recovery, RBI’s direct warning in the Financial Stability Report.

The central bank has warned of the dangers of Omicron in its Financial Stability Report released on Wednesday.

He says that even before the launch of Omicron, the pace of rapid recovery in the global economy was slowing down.

In particular, the effects of raw material supply disruptions, delays in supplies due to heavy congestion at ports, and labor shortages were beginning to be seen.

In such a situation, there is a crisis of Omicron on the prospects of India’s economy.

However, the country’s financial sector and domestic banking structure are fully capable of handling this situation.

In the Financial Stability Report, RBI Governor Dr. Shaktikanta Das has said that the Indian economy has recovered rapidly after the second wave in April-June 2021.

There is a visible but short-term risk because of Omicron. The situation going forward will depend on how fast private investment and private consumption improve.

Unfortunately, despite all signs of recovery in the economy, the private consumption position in the country remains weak.

The RBI governor has also described the inflationary situation as challenging and said that one has to be especially cautious about energy and food prices.

The report also warned about the bad debt situation.

It has been said that the phase of reduction in NPAs seen in the last financial year and the first half of the current financial year may prove to be temporary.

The gross NPA level (in proportion to advances) of commercial banks stood at 6.9 percent in September 2021, which is likely to rise to 9.5 percent from 8.1 percent in September 2022.

However, it has also been assured that the banks of the country have the capacity to deal with this situation.

Banks’ accounts shining due to write-off of NPAs, NPAs are being reduced by waiving off outstanding loans: RBI report.

In the Annual Banking Report 2020-21 released by the Reserve Bank on Tuesday, it has been said that the burden of bad loans i.e. non-performing assets (NPA) on the Indian banking sector is decreasing.

However, in the same report, there are some other facts about NPA management that show that NPAs have come down under external pressure.

In fact, banks are brightening their account books by writing off the old outstanding loans.

An amount of Rs 2.08 lakh crore has been written off in the year 2020-21. Banks have never written off such an amount in any one year.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2023 ANN All Rights Reserved