Events : Economic, Development & Social Issues

Panel Discussion on "2017 IMF Financial Sector Stability Assessment Report (FSSA) for India"

Held on Tuesday, 16th January, 2018 at 6.30 PM

Bangalore International Centre had organised a Panel Discussion on “2017 IMF Financial Sector Stability Assessment Report (FSSA) for India” on Tuesday, 16th January, 2018 at 6.30 PM. The Panelists were Mr. Andreas Bauer, International Monetary Fund’s senior resident representative for India, Nepal and Bhutan and Mr. Narayan Ramachandran, Chairman & co-founder of InKlude Labs. Prof. Charan Singh, Visiting Professor and Former RBI Chair Professor of Economics, Indian Institute of Management, Bangalore chaired and moderated the event.

The International Monetary Fund has released the report of its 2017 Financial Sector Stability Assessment (FSSA) for India on 21st December, 2017. Mr. Andreas Bauer, International Monetary Fund’s senior resident representative for India, Nepal and Bhutan explained through a power point presentation the highlights of the report. He stressed that the IMF had primarily looked at the Banking Sector in its report and reviewed the progress in this sector over the last 5 years. He noted with appreciation the progressive steps taken by the Government over the last 5years. At the same time he noted that the overall control of the Government over the banks is still very high which stands as a hindrance towards faster growth of the economy. In this context he pointed out that of the BRICS countries, Russia and China are far ahead of India.

In a sharp and witty rebuttal, Mr. Narayan Ramachandran pointed out that it was wrong to club India with Russia and China whose banking sectors are totally different and which are totally state-controlled. He urged that IMF in future may take note of the fact that the political economy in India is fundamentally different from Russia and China. He however agreed that within its politico-economic structure, the Government must rapidly reduce its regulatory controls over the banks and try to promote better governance so as to eliminate the possibilities of NPA-s.

Prof. Charan Singh in his observations commended both IMF and Mr. Narayan Ramachandran for their observations and urged that the Government must consider steps towards recapitalization of banks in the public sector.

During the Q & A session it was noted that the banks are yet to reach the large informal sector and that their lending and investment pattern would need drastic changes.