More details on RBI’s annual report 2019-20

More details on RBI’s annual report 2019-20

Part of: GS-Prelims and GS-III – Economy

In News:

• Recently, the RBI has released its annual report for 2019-2020.

Key takeaways 

• Temporary prohibition on loan instalments, postponement of interest payments and restructuring initiatives taken by RBI during Covid-19 pandemic have prevented a big spike in NPAs till now.
• Bank credit growth has slowed significantly in 2020 despite the RBI’s efforts to infuse liquidity into the banking system.
• Frauds reported by banks of Rs.1,00,000 and above value have more than doubled (28% increase) in FY 2019-20.  
• The public sector banks accounted for most of these frauds (80%).
• The rural demand fared better than urban areas due to the increased pace of kharif sowing. 
• In Hospitality, hotels and restaurants, airlines and tourism sectors, employment losses are more severe than in other areas.

• Inflation may remain high in the second quarter of 2020-21. 
• Currency notes of ₹2,000 denomination were not printed in 2019-20 and the circulation of these notes have declined over the year. 
• Compared to the previous year, there was an increase in counterfeit notes detected in the denominations of ₹10, ₹50, ₹200 and ₹500. 
• Counterfeit notes detected in the denominations of ₹20, ₹100 and ₹ 2,000 declined.

Suggestions Made by RBI:

• Targeted public investment along with asset monetisation and privatisation of major ports.
• Apex authorities to drive structural reforms and speedier implementation of infra projects.
• Recapitalisation of public sector banks,.
• Deep-seated and wide-ranging reforms to regain losses.