The Indian financial system has grown far stronger than in the past and is broadly an outlier amongst countries with regard to consistency in growth amidst a challenging global economic environment, said M. Rajeshwar Rao, RBI Deputy Governor.
"Excluding the post-COVID rebound in 2021-22, India's real GDP growth in 2023-24 accelerated to its highest since 2016-17 and surprised to the upside. It has represented a turning point in the growth trajectory from an average of 7 per cent pre-2020 to an average of 8 per cent or higher during the period since then, largely domestic in origin.". He said at the J P Morgan India Leadership Series Lecture recently, "Inflation is now expected to average at around 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26."
He added that this may therefore be the ground for sustainable future growth, consumption, and investment climate, with external competitiveness.
He also mentioned that the banking sector in India has actually turned around quite a bit in terms of capital adequacy, asset quality, and profitability, supported by sound macroeconomic fundamentals and rising business confidence. The credit growth was also strong, particularly in personal loans and loans to the services sector.
The GNPA ratio has now come down to a multi-year low of 2.8 per cent while NNPA stands at 0.6 per cent for Indian banks. Banks continued to remain in the good profit streak, with return on equity of 13.3 per cent and RoA of 1.38 per cent as of March 31, 2024.
Though NBFCs too have registered healthy parameters as of end-March 2024, with CRAR at 26.6 per cent, the GNPA ratio was 4.0 per cent and RoA 3.3 per cent.
He has often been quoted highlighting that in calendar year 2024, it achieved the best CCPI score across the G20 countries alone, which is a strong commitment this nation has undertaken toward environment sustainability.
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