The Economic Survey 2022, tabled by Union Finance Minister Nirmala Sitharaman in Parliament on Monday. Stated that the commercial banking system has so far weathered the COVID-19 pandemic shock even.
According to the economic survey, the gross non-performing advances ratio of Scheduled Commercial Banks (SCBs) continued to decline from 11.2 percent in 2017-18 to 6.9 percent by September 2021. Moreover, the SCBs witnessed net Non-Performing advances ratio declined from 6 percent to 2.2 percent during the same period, ANI reported.
The survey further said, “accommodative money policy, along with other regulatory dispensations, asset classification standstill. Temporary moratorium and provision of adequate liquidity put in place in order to provide a safety net to the system.”
“Liquidity has been down partly but remains in surplus mode and regulatory measures realigned,” read the survey.
At the sectoral level, credit to the agricultural sector grown and improvement can in the industry sector, whereas the service sector is yet to recover. Mentioning the bull run in the capital markets, the survey said that 2021-22 was exceptional for the markets.
Between April and November 2021, Rs 89,066 crore raised through 75 IPOs, which is much higher in the last decade.
Noting that factoring is an important source of liquidity worldwide, especially for MSMEs, it said, the Factoring Regulation (Amendment) Act. 2021 enacted with the amendments in line with the recommendations of UK Sinha Committee.
“The significant regulations pertaining to the amendment act has been notified by the RBI in January 2022. The amendments liberalize the restrictive provisions in the Act and at the same time. Ensure that a strong regulatory/oversight mechanism is in place under RBI,” it said.