RBI Governor on Financial Stability

RBI Governor on Financial Stability

Shaktikanta SDas

It is well known that NBFCs are undergoing issues with regard to Financial Stability.  The NBFCs which are under current difficult periods account for a fifth of the Credit Market in the country.  In this regard the RBI Governor Shaktikanta Das has remarked as under:

  • Financial stability has emerged as a key consideration for formulation of monetary policies in the post 2008 financial crisis, let apart the inflation and growth areas.
  • The Governor also remarked that it is necessary that for an improved growth of the economy a healthy financial sector is the basic need and hoped that economic reforms and a stable Government, in the country should contribute for a reversal in the persisting weakness.
  • Also, he added that the Central Bank is taking new strategies on the management and supervision of the financial sectors, including large NBFCs, in order to ensure a financial stability in their working.
  • Though a steady balance is required to be maintained, between inflation and growth, as was adopted by the Monetary Policy in the past, it is equally important that financial stability is also given importance.
  • Thus the Governor said that Financial Stability is a key factor for deciding the country’s monetary policy which could alone make such policies more effective.
  • • Also, he said that although the focus of monetary policy is mainly inflation and growth, the basic theme has at all times been only the Monetary Policy which cannot be forgotten.

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