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The Reserve Bank of India (RBI) having achieved the unique feat of balancing growth and inflation control, can become a model for the world and take global leadership, Narendra Modi, Prime Minister of India, said on Monday while speaking at a function to mark the commemoration of RBI’s 90th year in Mumbai.
He also released a commemorative coin to mark the occasion.
The Reserve Bank was set up on April 1, 1935 in Calcutta as a joint stock company and it was nationalized on January 1, 1949. Incidentally, Mr Modi had attended the 80th foundation day function in 2014.
“While several developed countries of the world are trying to recover from the economic shock of the pandemic, the Indian economy is creating new record. The RBI has taken India’s success global,” he said.
Stating that balancing inflation control and growth was a unique requirement for any developing country, he said “RBI has become a model for this and can take global leadership. I am saying this due to my experience of 10 years. The RBI’s leadership can be of great help for the whole Global South.”
He said for the next 10 years the RBI should develop monetary policy tools to meet the expectations of India’s youth and cater to the needs of emerging sectors such as space technology, digital technology and tourism. “RBI needs to think out of the box,” he emphasized.
He said the policies to be made in the next decade would be crucial for achieving the desired objectives.
Pointing out that in 2014 when he attended the same anniversary event, the condition of the Indian banking sector was abysmal, he said rising NPAs had threatened the stability of the banking sector.
“There were concerns from all over. But today India’s banking system has established itself as strong and sustainable one. It has now come back to profit and is showing record improvement in credit growth,” he said.
He said now RBI should focus on making policies to ensure ease of banking for every segment of the society whose banking needs might be different.
“Everyone should have access to credit as per their needs. As a regulator, the RBI has brought in rule-based discipline and institutionalized financially prudent practices. Now RBI should evaluate the credit needs of different segments of the economy and prepare from now,” he added.
He said every attempt must be made to ensure that the Indian rupee appreciates and is accepted in the world.
Speaking during the occasion, Finance Minister Nirmala Sitharaman said “Institutional integrity is something I would credit the RBI and among the very many central banks India’s RBI for its institutional credibility needs a big applause.”
RBI governor Shaktikanta Das in his address said the well-calibrated and co- ordinated monetary and fiscal policies adopted in India went a long way in shielding the economy from the Covid-19 pandemic and the ongoing geopolitical hostilities’ shocks and also helped India emerge even stronger than before.
“It is a matter of satisfaction that today our GDP growth is robust; inflation is moderating; the financial sector is stable; the external sector remains resilient; and forex reserves are at an all-time high,” he said.
“Over the years, the Reserve Bank has emerged as a symbol of stability, resilience, and commitment to the welfare of our citizens. This has been possible due to the contributions made by generations of Team RBI,” he said.
“As we move towards RBI@100, the Reserve Bank remains focused on ensuring a stable and strong financial system that would act as a bedrock for our country’s economic progress,” he added.
