Imf Team To Meet Rbi Officials, Bankers

A team of officials from the International Monetary Fund (IMF) is currently in Mumbai to meet Reserve Bank of India top brass and a cross-section of bankers. The team is in town to discuss the current economic environment and the trends in the banking sector.

According to an official with Bank of Baroda, one of the banks scheduled to meet the IMF team, the agenda of the meeting includes the current trends in the banking system and the level of non-performing assets of the public sector banks.

At the end of the last financial year, the net non-performing assets of the banking system was Rs 20,284.73 crore. The net non-performing assets equalled 9.18 per cent of net advances of the system. The high level of non performing assets has been a cause of concern and the committee on capital account convertibility headed by SS Tarapore which recommended that the NPA level should be brought down to 5 per cent over the next three years. The issue of freeing capital controls is also under the microscope given the recent turmoil in the foreign exchange markets.

 

The RBI has unleashed a high interest rate regime to fight the depreciation of the rupee vis-a-vis the dollar.

The IMF team is visiting the country at a time when there are slim chances of a pick up in growth and there is political uncertainty and conflicting signals on future course of reforms. As against the target of 7 per cent, the economy is expected to grow at around 6 per cent.