In terms of market dynamics, the financial landscape in India is undergoing a structural transformation, driven by factors like innovations in technology, financial deepening, and changing savings and investment patterns. Each of these shifts has a bearing on how financial entities carry out their business and adapt to the emerging risks
Mumbai: RBI Governor Shaktikanta Das said on Friday that amidst global challenges and uncertainties, India stands out as a fast-growing major economy with strong macroeconomic fundamentals, backed by a healthy and resilient financial sector.
“The recent annual financial results of banks and NBFCs indicate that the financial system remains sound and resilient. Further, macro stress tests done by the Reserve Bank reveal that the banking sector will continue to remain resilient even under stress scenarios,” he observed at a media event here.
Given the strong macroeconomic configuration, favourable demographics and significant pace of digitalisation, the Indian financial sector is poised to scale new heights, he added.
In terms of market dynamics, the financial landscape in India is undergoing a structural transformation, driven by factors like innovations in technology, financial deepening, and changing savings and investment patterns. Each of these shifts has a bearing on how financial entities carry out their business and adapt to the emerging risks.
The Reserve Bank has also been actively fostering innovation by envisaging mechanisms like the United Payment Interface (UPI), regulatory sandbox, co-lending models and account aggregator framework, Das said.
With the synergies provided by mobile phone penetration, internet availability, reoriented payment systems and the multitude of customer data points, lending institutions as well as financial markets have been able to leverage upon such mechanisms to amplify their reach to the target segments and also carry forward the agenda of a more inclusive financial sector, he pointed out.
Overall, there has been a transformation in the banking and financial landscape in the last decade driven by technological innovations, changing consumer preferences and the emergence of alternative business models. While these have fostered competition and collaboration, they also have implications for consumer trust and regulatory oversight. Such structural changes also create opportunities as well as challenges. Financial institutions like banks, NBFCs and others need to carefully assess the impact of these changes on their business models, resilience and sustainability, the Governor added.
Economic Survey to be tabled in Parliament on July 22
Finance Minister Nirmala Sitharaman will table the Economic Survey in Parliament on July 22, a day ahead of the Union Budget, which will be a report card on the economy and also the growth outlook ahead.
The survey gives a detailed account of the state of the economy, prospects and policy challenges. It is prepared by a team led by chief economic adviser V Anantha Nageswaran.
The Economic Survey provides statistical information and analysis on various sectors of the economy as well as data on employment, GDP growth, inflation, and the budget deficit.
India has retained its tag as the fastest-growing economy, and the economic survey will be presented at a time when the IMF has just raised its economic growth forecast for the country for FY25 to 7 per cent from 6.8 per cent projected in April.
“The forecast for growth in India has also been revised upward, to 7 per cent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas,” the IMF said.
In June, the Reserve Bank of India revised the growth forecast to 7.2 from 7 per cent.
The RBI sees India moving ahead towards an 8 per cent GDP growth trajectory on a sustained basis, driven by structural economic reforms such as GST.
“If you look at the average growth India recorded over the three years, the average comes to 8.3 per cent and the current year we have given a projection of 7.2 per cent growth,” RBI Governor Shaktikanta Das said.
He also said the Indian economy in the last financial year 2023-24 contributed to 18.5 per cent of the global growth which is a major achievement as it was much lower 7 or 8 years ago. The IMF has projected that this growth will go up, he added.