Raghuram Rajan in the Financial Stability Report (FSR) June 2016 said that though India’s financial system remains stable, the banking sector is facing significant challenges.
“As global uncertainties and transiting geopolitical risks impact India, continuation of sound domestic policies and structural reforms remain the key for macroeconomic stability,” Rajan said.
He further said, “Indian economy at this juncture stands out in terms of growth and investment potential. With the Government’s commitment to continue on the path of fiscal discipline, the efforts on containing the revenue deficit and rationalising subsidies need to be reinforced, even as gross fixed capital formation needs a fillip”.
The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. Besides, the Report also discusses issues relating to development and regulation of the financial sector.