MUMBAI: Reserve Bank of India governor Shaktikanta Das on Wednesday said latest data suggests some stabilization in economic activities in the second quarter of this fiscal.

“Revival of the economy will be gradual,” said Das, addressing a webinar organised by industry body FICCI.

Emerging markets have bounced back and cut in policy repo rates has eased key operations, he said, adding current G-sec borrowing rates are the lowest in last 10 years. 3.2 trillion of bond issuance in corporate bond market has happened till 28 August.

“We have taken care of MFIs, small size NBFCs and cooperative banks. We are in constant engagement with NHB, Sidbi to monitor the market situation and measures will be taken by RBI when required,” said the governor.

RBI will focus on five key areas to assist a revival of the economy in the coming few months, Das said.

“There are five key areas that I propose to focus on that I think will determine stability and step up India’s growth in the medium term. First is human capital with specific emphasis on education and health; second is productivity; exports which is leading to India’s role in the global value chain; fourth tourism; food processing associated productivity areas,” said Das.

In March, RBI had announced loan moratorium to provide relief to borrowers and enable continuity of viable businesses impacted by covid-19 pandemic. According to RBI data, nearly half of the customers accounting for around half of outstanding bank loans availed of the benefit. The central bank had initially allowed moratorium for the three months ended 31 May but later extended it till end-August.

Later, RBI allowed debt recast for both corporate and retail borrowers. Lenders can extend the repayment period by a maximum of two years, allowing respite in a situation where covid-19 has left millions jobless, curtailing their ability to repay existing debt.

RBI had also announced the constitution of an expert panel under K.V. Kamath to suggest financial parameters for resolution of stressed assets amid the crisis. The panel is expected to submit its recommendations to RBI, which will notify them along with modifications, if any, in 30 days.

Under the resolution framework, RBI has allowed conversion of any interest accrued, or to be accrued, into another credit facility, or granting of moratorium and/or rescheduling of repayments, based on an assessment of income streams of the borrower, up to two years.

In the FICCI webinar, Dinesh Kamabar said,” It will take 62% people believe that the economy will take more than a year to come back to normalcy. 60% believe that the capacity utilisation will be below 50%. 49% people believe that the unlocking will have no impact on the company’s cash flows. Earlier in June 79% believed that there will be no impact of the unlocking on cash flows.”

Gopika S Gopakumar contributed to the story.

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