New Delhi, Aug 21 (KNN) Reserve Bank of India (RBI) Governor Shaktikanta Das said the economy faces challenges but maintaining a positive outlook was important and called on banks to spur credit growth amid flagging investment.

“There are challenges in the economy, several sectoral issues, and external global headwinds, but the country cannot live in isolation. It needs to look down at the opportunities and capitalise on that. The financial sector should not worry too much over the slowdown, he said.

Shaktikanta Das was speaking at the annual banking conclave conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks’ Associations (IBA).

Decline in the sale of vehicles, a rise in unsold apartments and the liquidity squeeze gripping nonbanking finance companies (NBFCs) have motivated Rahul Bajaj, AM Naik and Deepak Parekh, among others, to cite the economic slowdown during the past few weeks, Das said.

With the slowest rate, the economy rose at 6.8 percent in FY19. Industrial output in 11 of the 23 manufacturing sectors has narrowed in the month of June compared from a year ago.

“NBFC sector broke after the Infrastructure Leasing & Financial Services (IL&FS) default in September last year. Also, demand destruction in the automobile sector and a breakdown in India’s consumption economy. From then, repayment worries have taken big companies such as Dewan Housing, Essel Group, and the Anil Ambani-led Reliance Group”, Das stressed.

“Nearby 50 NBFCs and mortgage firms are under close watch but no plans are there to conduct a review of the sector’s assets. At the moment, there is no proposal to have an asset-quality review (of NBFCs), the governor said.”