RBI Governor Shaktikanta Das on Thursday appreciated the government's response to the COVID-19 crisis as being fiscally “very prudent and very calibrated”.
"I cannot speak for the government. But I just want to say that in the central bank, as observers of what is happening in the country in the fiscal policy, I think the government's response has been very prudent and very calibrated," Das said.
Speaking at an event organised by financial daily Business Standard, Das said the government was "responsible" in announcing the measures right from the start which focused on the poor and vulnerable people. Prime Minister Narendra Modi had announced a Rs 20 lakh crore stimulus package, which included additional spending of about 2 per cent of GDP by the government, as well as liquidity measures by the RBI.
Meanwhile, Das also welcomed the government's strategy of consolidating public sector banks, saying lenders with large balance sheets will be helpful. "Current step of consolidation is a step in right direction. Indian banks can reap the benefits of scale and become a partner in the newer business opportunities across the globe. Larger banks can compete with global banks,” Das said. He, however, said that while size is essential, efficiency is "more important".
The Governor further said it is "fundamental" to reform the nature of governance and risk management of all the banks going forward.
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