In an encouraging development, RBI’s deputy governor S.S. Mundra underscored economic growth gradually picking up and India to meet the Reserve Bank of India’s (RBI)’s inflation target of 6% by January 2016. He also pointed to the possibility of some global uncertainty, but at the same time highlighted that system was well prepared to deal with systematic shocks.
Bolstering prospects for further interest rate cuts, India’s consumer prices inflation accelerated to 5.11% in January, after shifting to a new base year for calculating prices, but stayed well below the central bank`s target.
The deputy government further stated that the state run banks would require Rs 2.5 trillion in capital to meet Basel III requirements by 2019, which is higher than the requirement of Rs 2.4 trillion envisaged for these banks earlier.