The central bank also noted a 'plateauing' of stressed assets on the books of banks amid a rise in the financial stability risks exacerbated by stress for NBFCs, the RBI added in the report.
Reviving consumption and private investment is the highest priority for FY20, even as RBI says that the growth deceleration is a “soft patch mutating into cyclical downswing” and not structural. In anticipation of revival in growth, the bank credit flows have surged, according to the latest RBI annual report. The central bank also noted a ‘plateauing’ of stressed assets on the books of banks amid a rise in the financial stability risks exacerbated by stress for NBFCs, the RBI added in the report, which is released every year. RBI’s annual report analyses the working and operations of the central bank and suggests measures to improve economic performance.
Watch: How to file ITR-1 in less than 15 minutes
The central bank also pointed towards a need to have sensitivity on ‘deleterious’ impact of global spillovers since spill-backs from emerging markets is a danger for the global economy. The RBI released an annual report for 2018-19 also said that India is not immune to negative cues from global factors. Several uncertainties remain on near term global economic outlook both for the world and India, the report added. The aggregate demand in India weakened more than first anticipated, it added. Meanwhile, the government has also pointed out the ongoing slowdown in the economy. However, the government is optimistic about making India a $ 5 trillion economy by 2024.
The FY19 annual report is significant in the backdrop of the release of the new economic capital framework under which RBI will transfer Rs 1.76 trillion surplus to the government. The transfer includes Rs 1.23 trillion of surplus for 2018-19 and Rs 52,637 crore of excess provisions. The report is significant as it would throw light on the annual accounts and give a detailed explanation of the reason behind the rise in surplus during the last financial year to the government.