is a privilege to write to you as the Chairman of the Board of Federal Bank. It is noexaggeration to say that your bank has been talked about as the "perfect"example for effortlessly combining old world values with the innovative chutzpah of themillennial generation. Thanks to the guiding philosophy of your Bank in being 'Digital atthe Fore Human at the Core'. So it's with much pride and confidence that I am addressingyou all. Banking Industry in India is shaping up quite materially through what I believeare some of the megatrends today. Though the industry is passing through choppy waterswith asset quality deterioration and capital constraints there are several structuralenablers that are being put in place which will eventually ensure balance. PromptCorrective Action (PCA) by RBI is one among many measures which is reflective of thechanging times that we are part of. These headwinds and the governance related issues haveimpacted the pace of growth of the banking sector.
The system is continuously optimistic of a revival scenario with enablers like theInsolvency and Bankruptcy Code (IBC) which in turn would help improve the NPA resolutionand thereby release capital for the banks. The setbacks reported by many banks in Q4 of2017-18 were mainly on account of acceleration in terms of bad loan recognition in linewith the RBI's revised framework on stressed assets. However these reforms have resultedin several positive outcomes including the chunky recognition of vintage bad loans.
Despite the global economy witnessing another year of missed outcomes in terms ofeconomic performance in the year under consideration India stood tall amongst its globalpeers and continues to have a significant growth promise in the future. During the lastFinancial Year there were several structural reforms implemented in the country includingthe Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code amongst others.These structural initiatives are important for enhancing the country's futurecompetitiveness and in the long run place India much higher among the Global economies.
Today India is seen as one of the fastest growing economies recording a quarterlygrowth rate of 7.20% p.a. for December 2017 as against China's 6.80%. At a nominal GDP ofUS $ 2.6 Trillion India is the sixth largest economy after US China Japan Germany& U.K. In terms of purchasing power parity we are the third largest economy with GDPof US $ 9.5 Trillion. Bouncing back from the twin disruptions of demonetization and GSTimplementation; growth is picking up fast and is poised to attain 7.40% in fY 2018-19.
I am happy to report to you that despite such uncertain environment both in India andglobal markets your Bank remained on its track with its robust operating performance. Thebank like many of its peers had to battle headwinds in the environment and readjust torevised regulatory environment. The resultant decisions have had a bearing on the street.However your bank remained amongst the very few Banks in the country which continue topractice very high standards of governance and adherence to regulatory requirements.Federal Bank with Its strong fundamentals Is confident of tiding over these hiccups andemerge stronger.
Federal Bank recognizes the principles and importance of Corporate Governance and hasbeen complying with not only the statutory requirements but also has voluntarilyformulated and adhered to a set of strong Corporate Governance practices. The Bank hasalways strived hard to best serve the interest of all its stakeholders includingShareholders Customers employees / people Government and Society at large. Thephilosophy of the Bank enables to maintain a high level of business ethics to maximize theshareholders' value and to protect their interest. It is a matter of great pride that oursuccess over the years has come without ever compromising on integrity or socialobligations. In trying times as these when Corporate Governance of Banks arebeingextensively discussed and debated your Bank with its upright principles and well laidout practices has carved out a unique space for itself.
The composition of the Board of the bank is a testimony to the importance that the Bankaccords to maintaining the highest level of Corporate Governance. The members of the Boardof your bank are best representatives of their respective fields both in knowledge andexperience. In the last Financial Year the Board of the Bank was strengthened with theaddition of Mr. A P Hota who earlier headed the National Payments Corporation of India.Recently a highly seasoned Banker Mr. Deepak Maheshwari has also joined the Board of theBank. I take this opportunity to place on record the valuable contribution of Mr. K MChandrasekhar the past Chairman and Independent Director for the overall growth of thebank. He laid down the directorship of the Bank on attaining his retirement age. We takethis opportunity to wish him very happy years ahead.
As we embark upon a new transformation phase with the Indian economy on the path ofrecovery I am confident that the Bank will step into even happier times in the FY2018-19. Our focus is to make the Bank ready for sustainable and inclusive growth withimproved quality of assets and earnings. Strategic focus on people processes productsand technology will help to overcome the business challenges and provide a strongfoundation for growth in the years to come.
As we continue our journey to create long-term value for our stakeholders I would liketo thank all the shareholders for reposing confidence in Federal Bank's strategy andoverwhelmingly supporting us through the Bank's ups and downs. I would also like to thankthe governments customers and investors for their relentless support to the Bank. Theemployees and the Management team have worked very hard during the year and I would liketo thank them for their tireless commitment to Federal Bank. Finally I look forward toyour continued and valuable support in the years to come.