This time also, the three things to watch out for in this RBI annual report for the FY 2018-2019.
The Reserve Bank of India (RBI) is set to release its Annual report for the FY 2018-2019 on Thursday. Everyone is waiting with bated breath for the report, as it is coming at a time when the bank has made some important decisions, such as accepting the recommendation of the Bimal Jalan Committee and approved the transfer of Rs 1.76 lakh crore surplus money to the government.
In its last year’s annual report, the RBI dwelt at length on a range of issues--- from credit growth to global trade scenario and from fiscal risks to improving the banking system. The report threw light on almost all crucial issues in the economy. This time also, the three things to watch out for in this report are RBI’s balance sheet, economic assessment of the country and state of the banking system.
The annual balance sheet will provide a detailed explanation of the reason behind the increase in surplus during the last financial year. The FY19 annual report is also significant in the backdrop of the release of the new economic capital framework under which, the RBI will transfer Rs1.76 lakh crore to the government. The transfer includes Rs 1.23 lakh crore of surplus for 2018-19 and Rs 52,637 crore of excess provisions.
The annual report is likely to reiterate RBI’s concerns on the current growth slowdown. In its last monetary policy meeting, RBI had revised the GDP growth for FY20 to 6.9 per cent from 7 per cent in the June policy, citing weak economic activity and global slowdown. So, it would be interesting to see the RBI’s economic assessment in its annual report.
In its financial stability report, the RBI had said that there is a need for greater surveillance of NBFCs and housing Housing Finance Companies (HFCs) as the failure of these companies can cause losses comparable to those caused by big banks. As NBFCs plays a very important role in meeting the demand for credit, loans and other financial services in the economy. Thus the annual report is likely to highlight the state of NBFCs and the banks.