IMF official says Indian banks' balance sheet clean-up a priority

IMF forecast India's economic growth rate should pick up to 7.5% in the 2016/17 fiscal year, aided by oil price decrease

India must prioritise clean-up of its banks' balance sheets and tackle corporate debt overhang, said Jose Vinals, Financial Counsellor at the IMF, on Thursday, while also cautioning against the risk of potential capital outflows.

Vinals, who was speaking at an event organised by the Reserve Bank of India (RBI), warned of further downward revision to global growth estimates at upcoming spring meetings, calling for policymakers to adopt a more comprehensive plan to strengthen growth prospects.

Last week, the International Monetary Fund (IMF) forecast India's economic growth rate should pick up to 7.5% in the 2016/17 fiscal year, aided by a collapse in oil prices and relatively low exposure to current global financial turbulence.