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Reserve Bank of India Governor Shaktikanta Das has credited timely and proactive policy and regulatory measures by the central bank in the past four-five years for the ‘gradual and consistent turnaround’ in the banking system. He said the country's banking sector was beset with a host of issues with record high bad loans as of March 2018, gross Non-Performing Assets (NPAs) were around 11 per cent and returns on assets and equity were in the negative. He noted that eleven banks were under prompt corrective action as of June 2018 but today none. 

The RBI governor stated that all key indicators of banks -- capital adequacy, asset quality, and profitability have improved in the past four years. He also said that credit growth is now broad-based and backed by strong fundamentals of banks and also non-banks. He said ‘on the whole, our banking sector has emerged stronger from the unprecedented challenges of recent years’. The return on assets and return on equity have gone up 119 bps and 1,131 bps, respectively and the liquidity coverage ratio was at a comfortable 135.4, much above the minimum stipulation of 100. Following the IL&FS crisis, the RBI heightened its focus to foster macro-financial stability through a series of conventional and non-conventional measures.

He further said ‘when the pandemic struck, our response was swift and decisive and a slew of measures such as targeted term repo operations up to Rs 1,00,000 crore, reduction in the cash reserve ratio by 1 percentage point and enhancement of access to marginal standing facility by banks, was announced on March 27, 2020’. All supervised entities were advised in March 2020 to activate their existing operational and business continuity plans and manage the risks posed by the pandemic. On the monetary policy front, he said the repo rate was slashed 115 bps between March and May 2020 and liquidity enhancing measures equivalent to 8.7 per cent of GDP were announced.