India’s econmic, banking systems are strong By Reuters

Indian Prime Minister Narendra Modi has announced that the country’s economy and banking sector remain robust, despite global market instability. Speaking at an India Today gathering, Modi said: “Amidst a global crisis, today India’s economic system is strong, the banking system is strong. This is the power of our institutions.” International bank stocks suffered in the wake of the collapse of two US mid-size banks, leading to concerns about what may be hidden in the wider global financial system.

India has weathered various economic storms this year, including the potential devaluation of the rupee, the rising cost of oil and the effects of the US-China trade war. The government has unveiled measures including increased public spending, tax cuts and regulatory changes to stimulate the economy. The Reserve Bank of India has also cut interest rates five times this year, the most recent being on 4 October, leading to claims that it may introduce quantitative easing.

However, critics have suggested that while the Modi administration is taking steps to increase liquidity and investment in the economy, the country’s financial institutions need further reforms. Earlier this month, the CEO of SBI, India’s largest state-owned bank, said the nation was facing “something of a banking crisis” and called for “urgent structural reforms”. SBI has also announced that its future lending will be focused on better risk assessment, as institutions seek to address an increasing number of non-performing assets.

Modi has faced criticism both domestically and globally for the country’s economic slowdown throughout 2019. Confronted with geopolitical challenges including terrorism and a resurgence of nationalism, the Indian leader has vocally committed to transforming the country into a modern, digital nation. The nation’s banking system currently remains heavily state-controlled, with efforts to privatise public sector banks still ongoing.



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