PM releases commemorative coin to mark 90 years of RBI

“RBI plays a pivotal role in advancing our nation's growth trajectory”

geetanjali

Geetanjali Minhas | April 1, 2024 | Mumbai


#Narendra Modi   #Finance   #Economy   #RBI  
Prime minister Narendra Modi releasing the commemorative coin during the opening ceremony of RBI@90 in Mumbai on Monday
Prime minister Narendra Modi releasing the commemorative coin during the opening ceremony of RBI@90 in Mumbai on Monday

The Reserve Bank of India has reached a historic landmark today completing 90 years of existence, prime minister Narendra Modi said here on Monday. He was addressing the opening ceremony of RBI@90, a program marking 90 years of the central bank, which commenced its operations on the first of April in 1935.

He underlined that the RBI has been witness to both the pre- and post-independence eras and it has created an identity around the world based on its professionalism and commitment. He congratulated all staff on the occasion. Deeming the present RBI staff as fortunate, the PM said that the policies drafted today will shape the next decade of RBI which will take it to its centenary year. “The next decade is extremely important for the resolutions of a Viksit Bharat,” he said, highlighting the RBI’s priority towards fast-paced growth and focus on trust and stability. The PM also conveyed his best wishes for the fulfilment of its goals and resolutions.

Emphasising the importance of coordination of monetary and fiscal policies in the GDP and the economy of the country, the PM recalled the 80-year celebration of RBI in 2014 and remembered the challenges and problems like NPA and stability faced by the banking system of the country at that time. He said that starting from there, today we have reached a point where the Indian banking system is being seen as a strong and sustainable banking system of the world as the near moribund banking system of that time is now in profit and showing record credit.

Modi credited clarity of policy, intentions and decisions for this transformation. “Where intentions are right, results too are correct.” Speaking on the comprehensive nature of reforms, the PM stated that the government worked on the strategy of recognition, resolution and recapitalisation. A capital infusion of Rs 3.5 lakh crore was undertaken to help the public sector banks and address many governance-related reforms. The Insolvency and Bankruptcy Code itself has resolved loans amounting to Rs 3.25 lakh, he pointed out. He also said that more than 27,000 applications involving underlying defaults of more than Rs 9 lakh crore were resolved even before admission under IBC. Gross NPAs of banks that stood at 11.25 percent in 2018 came down to below 3 percent by September 2023. He said that the problem of twin balance sheets is a problem of the past. PM Modi complimented RBI for their contribution to this transformation.

He pointed out that even though the discussions related to the RBI are often limited to financial definitions and complex terminologies, the work carried out at the central bank directly makes an impact on the lives of common citizens. In the last 10 years, the PM said, the government has highlighted the connect between the central banks, banking systems and beneficiaries at the last queue and gave the example of financial inclusion of the poor.

He mentioned that 55 percent of the 52 crore Jan Dhan accounts in the country belong to women. He also mentioned the impact of financial inclusion in the agriculture and fisheries sector where more than 7 crore farmers, fishermen and cattle owners have access to PM Kisan Credit Cards providing a significant push to the rural economy. Referring to the boost for the cooperative sector in the past 10 years, the PM threw light on the importance of regulations of the Reserve Bank of India regarding cooperative banks. He also mentioned more than 1200 crore monthly transactions via UPI making it a globally recognized platform. The Prime Minister also touched upon the work being done on Central Bank Digital Currency and said that the transformations of the past 10 years have enabled the creation of a new banking system, economy and currency experience.

The PM emphasised the importance of clarity for the targets of the next 10 years. He pointed out the importance of keeping an eye on the changes brought about by the cashless economy while promoting digital transactions. He also stressed the need for deepening financial inclusion and empowerment processes.

Stressing the diverse banking needs of a large country like India, the PM underlined the need to improve ‘ease of doing banking’ and provide tailor-made services as per the needs of the citizens. He underscored the role of artificial intelligence and machine learning.

He highlighted the role of RBI in speedy and sustainable growth of the country. Noting the achievement of RBI in infusing rule-based discipline and fiscally prudent policies in the banking sector, the Prime Minister also asked for advance estimation of the needs of various sectors to take proactive steps while assuring the banks of government’s support.

Modi also mentioned inflation-controlling measures like giving the right of inflation targeting to the RBI and praised the performance of the Monetary Policy Committee in this regard. Steps like active price monitoring and fiscal consolidation kept inflation at a moderate level even during difficult times of the pandemic.

“The Indian economy is creating new records at a time when many countries in the world are still trying to recover from the economic shock of the pandemic,” he said. He underlined the role of RBI in taking India’s successes to the global level. Highlighting the importance of creating a balance between inflation control and growth for any developing country, PM Modi expressed confidence that RBI can become a model for this and play a leadership role in the world, thereby supporting the entire global south region.

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