RBI's 'timely action' reduced the growth of 'unsecured loans': Shaktikanta Das

RBI's 'timely action' reduced the growth of 'unsecured loans': Shaktikanta Das

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Mumbai: reserve Bank of India Governor Shaktikanta Das said on Thursday that timely action and quick measures have brought the pandemic under control. Development Failure to do so could lead to “big problems,” he said.
Addressing the 2nd edition of the Global Conference on Financial Resilience organised by the College of Supervisors (CoS) reserve Bank of IndiaDas said the positive impact of timely interventions has resulted in “slowing down of growth unsecured loan,
The RBI governor said, “We thought these vulnerabilities, if not addressed, could become a big problem.So, we thought it would be better to act preemptively and slow down the loan growth.”
According to Das, “India's domestic financial system It is in a much stronger position now than it was before we entered the Covid crisis phase. It is in a much stronger position now, characterised by strong capital adequacy, low levels of non-performing assets and healthy profitability of banks and non-banking lenders, i.e. NBFCs.”
Das also pointed out that after the RBI action, the growth in the credit card portfolio has come down from 30 per cent to 23 per cent. Similarly, the rate of bank lending to non-banking financial companies (NBFCs) has come down from 29 per cent to 18 per cent.
He said, “I would like to congratulate the banks and other financial sector institutions for such a stellar performance in the year ended March 31. There is absolutely no room for complacency, because the world is changing, challenges are emerging, complexities are increasing, and problems can arise from any corner of the financial system within the country or the world, which may have nothing to do with you and me.”
The RBI on November 16, 2022, increased the risk weight on unsecured loans and exposures to NBFCs, allowing banks to deploy higher amounts of capital on such assets.
The first edition of the global conference was held in April last year.

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