RBI Gov. Says Covid-19 Worst Health & Economic Crisis in 100 Yrs, Sounds Alarm for Indian Economy

Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said the Covid-19 pandemic is the worst health and economic crisis in the last 100 years with unprecedented negative consequences for output, jobs and well-being, while sounding the alarm on Indian economy’s medium-term outlook.

Addressing the 7th SBI Banking & Economic Conclave, Das said the pandemic has dented the existing world order, global value chains, labour and capital movements across globe. However, he added that “perhaps, it represents so far the biggest test of robustness and resilience of our economic and financial system”. I

The Indian economy's medium-term viewpoint stays dubious despite the fact that the nation has begun re-opening after once again two months of an across the country lockdown, as request and gracefully stuns due to the coronavirus still pose a potential threat, the national bank senator said. 

Strategy reactions by the national bank seem to have worked up until this point, however going ahead the circumstance would require much progressively cautious evaluation, said Das 

Das, in any case, incorporated that the Indian economy has



started giving signs of normality easily in lockdown restrictions the country over, and post control of COVID-19, a very careful heading must be followed in precise relaxing up of countercyclical regulatory measures. 

The budgetary division should come back to ordinary working without depending on administrative unwinding as the new standard, he included. "Indian economy has begun giving indications of returning to regularity subsequent to facilitating of limitations," he said. 

The nation's banking and monetary framework is equipped for adapting to the situation in meeting this test, he declared. In these difficult occasions, banks need to improve their administration and hone their hazard the board, he said.

Banks will also have to raise capital in an anticipatory basis instead of waiting for a situation to arise, Das noted. The economic impact of the pandemic due to the lockdown and anticipated post-lockdown compression in economic growth may result in higher non-performing assets and capital erosion of the banks, Das cautioned. A recapitalisation plan for public and private sector banks has therefore become absolutely necessary, he said.