New Delhi: International Day of Banks is celebrated on December 4 to acknowledge the significant potential of banks in financing sustainable growth. In India, the economy's financial and banking sectors have shown strong performance despite continuous geopolitical challenges.
History: On December 19, 2019, the UN General Assembly adopted resolution 74/245, which designated December 4 as the International Day of Banks in recognition of the significant potential of multilateral development banks and other international development banks in financing sustainable development and providing know-how.
The day recognises the vital role of the banking systems in Member States in contributing to the improvement of the standard of living, the United Nations website states.
Banking Sector: There has been a significant enhancement in the asset quality of banks, led by improved borrower selection, more effective debt recovery and heightened debt awareness among large borrowers. In addition to regulatory capital and liquidity requirements, qualitative metrics such as enhanced disclosures, robust code of conduct, and transparent governance structures also improved banking performance.
The macro-and micro-prudential measures by the Reserve Bank of India (RBI) and the Government have enhanced risk absorption capacity in recent years, improving the banking system's stability. For the top 10 Indian banks in asset size, loans constitute more than 50 per cent of their total assets, making banks immune to the rising interest rate cycle, the Ministry of Finance earlier said.
Objectives of RBI: The framework of central banking policy in India has evolved around its objectives specified under the Reserve Bank of India Act, 1934, to regulate the issue of bank notes and keeping of reserves to secure monetary stability in India. It also operates the currency and credit system of the country to its advantage, and a modern monetary policy framework to meet the challenge of an increasingly complex economy, the RBI website states.
Strong Primary Markets: Indian capital markets have shown impressive results, with India's stock market capitalisation to GDP ratio ranking fifth globally. Primary markets remained robust during the Financial Year (FY) 24, facilitating capital formation of Rs 10.9 lakh crore, compared to Rs 9.3 lakh crore in FY 23.
Fund mobilisation through all three modes, viz., equity, debt, and hybrid, increased by 24.9 per cent, 12.1 per cent and 513.6 per cent, respectively, in FY 24 compared to the previous year, the ministry earlier stated.
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