Commenting on the recent banking scenario in India, the International Monetary Fund (IMF) has recently said that addressing the ongoing crisis in the banking sector is important for India to support investment and inclusive growth agenda. According to the report, IMF Spokesman Gerry Rice has been quoted saying, "Addressing the banking sector balance sheet issues and improving the performance of particular public sector banks is a very important issue for India to support investment and its inclusive growth agenda."
He further said that the authorities have made progress in addressing the stock of non-performing assets and were taking further measures to deal with the flow problem. The body further welcomed Reserve Bank of India (RBI) step to increase the repo rate by 25 basis point to 6.25 per cent. IMF spokesperson has said that keeping in mind the rising inflation and additional upside risks to the forecasts due to higher oil prices, exchange rate depreciation and other domestic factors, the IMF thinks that it is a right decision taken by RBI to hike the rates for the first time in last four years.
In January 2014, RBI had increased the repo rate to eight per cent to keep the inflation under check.
(With inputs from PTI)