Shaktikanta Das is Central Bank Governor of the Year

MR Shaktikanta Das, Governor of the Reserve Bank of India (RBI) since December 2018, was honoured with the Governor of the Year award at London’s Central Banking Awards 2023

- V. VAIDYANATHAN

This recognition provides an opportunity to reflect on the complex situations that unfolded over the last four years and the steps taken by the RBI in response to them.

In 2018 when he took over, following an AQR by the RBI, banks recognised losses on troubled corporate loans, following which many lenders couldn’t lend as they were low on capital, and many corporate borrowers couldn’t borrow as cash-flows were weak; a situation known as the “Twin Balance-Sheet Problem”. Fast forward to 2023, India enjoys a “Twin Balance Sheet Advantage”, with banks having healthy adequacy levels surpassing 16 per cent, and borrowers benefiting from robust cash flows due to a strong economy. Between 2018 and 2023, the Gross NPA of the banking system decreased from 10.8 per cent to 4.41 per cent, and the net NPA decreased from 5.3 per cent to 1.3 per cent.