China slow­down 'a risk' for global econ­omy: RBI

The Pak Banker - - COMPANIES/BOSS -

MUM­BAI: The Re­serve Bank of In­dia (RBI) Gov­er­nor Raghu­ram Ra­jan cau­tioned about a "sharp" slow­down in Chi­nese econ­omy which, he said, re­mained a "sig­nif­i­cant risk" for the global econ­omy. A sharp con­trac­tion in China's im­ports over the past year, for in­stance, had al­ready led to spill-overs through the trade, con­fi­dence, tourism and re­mit­tance chan­nels and SAARC na­tions had not been able to avert its im­pact, Mr. Ra­jan said dur­ing his in­au­gu­ral speech at the SAARCFINANCE Gov­er­nors' Sym­po­sium. "Bad loans in the bank­ing sys­tem were likely to grow over cur­rent lev­els and in ad­di­tion there might be se­ri­ous weak­nesses in the shadow bank­ing sys­tem, which could feed back to banks," he said.

The RBI Gov­er­nor also lauded the ef­forts taken by the gov­ern­ment in im­ple­ment­ing struc­tural re­forms to re­vive growth.

"Leav­ing aside the Goods and Ser­vices Tax (GST) re­form, a num­ber of other sig­nif­i­cant re­forms have also taken place, in­clud­ing the re­cent pas­sage of the new Bank­ruptcy bill, which is likely to speed up the res­o­lu­tion of dis­tress

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