Reserve Bank of India (RBI) Annual Report 2021-22
Recently the Reserve Bank of India (RBI) in its annual report for the year 2021-22 has underlined the importance of structural reforms to improve India’s growth potential.
RBI submits reports annually to the Central Government under the Reserve Bank of India Act, 1934.
Key findings of the report–
- Inflation: Headline inflation has crossed the upper tolerance limit (2 per cent) in the fourth quarter of FY 2021-22. This has made the conduct of monetary policy challenging.
- Liquidity: Rs. 2.2 trillion has been withdrawn from the economy to reduce inflation.
Following measures were taken for this:
- The cash reserve ratio (CRR) was brought down to pre-Covid levels, targeted long-term repo operations, and open market operations (OMO) were also resorted to.
- Surplus transfers: Despite a 20% increase in RBI’s earnings, a lesser amount of surplus transfer (Rs 30,307.45 crore) was made to the government over the previous year. The reason for this is that RBI has transferred Rs 1.14 lakh crore to its Contingency Fund.
- Non-Banking Financial Companies (NBFCs): The balance sheets of these companies had expanded in the year 2021-22 (till December 2021), but the asset quality of the sector has deteriorated.
- NBFCs have also been brought under its ambit by issuing guidelines for expansion of the Prompt Corrective Action Framework.
- Banking Sector: Gross Non-Performing Assets (NPAS) has come down to the lowest level in six years.
- Restructuring of loans: National Bank for Infrastructure Financing and Development (NABFID) has been set up to relieve the burden of long-term financing on banks.
- Growth: The Indian economy has been improving in the past year despite several adverse conditions.
- Their capacity utilization is approaching normal levels in many industries.
Source- The Hindu
