Mumbai, July 11 (KNN) Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday asserted that the Indian economy has started showing signs of normalcy with ease in lockdown restrictions across the country.

While addressing the 7th SBI Banking and Economics Conclave, Das said, ''Indian economy has started showing signs of going back to normalcy after easing of restrictions."

''Post containment of COVID-19, a very careful trajectory has to be followed in orderly unwinding of counter-cyclical regulatory measures,'' he added.

He further said that the financial sector should return to normal functioning without relying on regulatory relaxation as the new norm.

"Policy action in medium-term would require a careful assessment of how the crisis unfolds," he said, adding that building buffers and raising capital will be crucial not only to ensure credit flows but also to build resilience in the financial system.

While commenting on the country's banking and financial system, Das said that the system is capable of rising to the occasion in meeting this challenge.

''In these challenging times, banks have to improve their governance and sharpen their risk management,'' he suggested.

Das also said that banks would also have to raise capital on an anticipatory basis instead of waiting for a situation to arise.

Das also warned banks that the economic impact of the pandemic due to the lockdown and anticipated post-lockdown compression in economic growth may result in higher non-performing assets and