Reserve Bank of India (RBI) Governor Urjit Patel, who appeared before the Parliamentary Standing Committee on Finance, has stated that the central bank needed to keep a capital cushion in view of global financial uncertainty.
The RBI governor further said that the economy would get a boost from oil prices cooling off from four-year highs, and said fundamentals were robust. Moreover, he said that credit growth was 15 percent, inflation came down to 4 percent and cash to GDP ratio improved. Talking about the government's demonetisation decision, he said that the impact of November 2016 demonetisation had a transient on the economy.
Besides, talking about the implementation of the Basel III capital adequacy norms for banks, ha said adherence to the global norms was India’s commitment to G-20 nations. Additionally, at present, India's banking system, particularly state-owned banks, is grappling with huge bad loans. Recently, there has been a liquidity crisis for the important NBFC sector following re-payment default by IL&FS.