RBI aims to achieve macroeconomic objectives of price stability, growth and financial stability: RBI Guv
Mumbai, June 18 (KNN) The Reserve Bank of India will continue to focus on effective communication and coordination with all stakeholders to achieve broader macroeconomic objectives of price stability, growth and financial stability, said Shaktikanta Das, Governor of RBI.
Delivering a speech on the ‘Evolving role of central banks’ at Mussoorie’s Lal Bahadur Shastri National Academy of Administration, Das said “To reinvigorate growth by improving investment climate, a healthy financial sector, inter alia, plays an important role.”
In this context, the Reserve Bank has accorded high policy attention to reform both banking and non-banking sectors. We have been taking several steps to strengthen the regulatory and supervisory frameworks in order to increase the resilience of the banking system.
New guidelines have been issued for resolution of stressed assets, which will sustain the improvements in credit culture, he added.
He stated “In the non-banking sector, the Reserve Bank has recently come out with draft guidelines for a robust liquidity framework for the NBFCs. We are also giving a fresh look at their regulatory and supervisory framework.”
It is our endeavour to have an optimal level of regulation and supervision so that the NBFC sector is financially resilient and robust. The Reserve Bank will continue to monitor the activity and performance of this sector with a focus on major entities and their inter-linkages with other sectors. The Reserve Bank will not hesitate to take any required steps to maintain financial stability, said Das.
Highlighting the role of the Reserve Bank in the context of the mandate under the Reserve Bank of India Act, 1934, he said “This mandate has been interpreted over time as to maintain price stability, financial stability and economic growth with the relative emphasis between these objectives governed by the prevailing macroeconomic conditions. “
This role of the Reserve Bank has been restated as per the amendment in the RBI Act in May 2016 according to which “the primary objective of the monetary policy is to maintain price stability while keeping in mind the objective of growth”.
Therefore it has been our endeavour in the Reserve Bank to ensure price stability under the flexible inflation targeting regime and simultaneously focus on growth when inflation is under control, he further added.