RBI Releases June 2024 Bulletin: Key Highlights and Analysis

 

Today, the Reserve Bank of India (RBI) published the June 2024 issue of its monthly Bulletin. This issue includes three notable speeches, three in-depth articles, and the latest statistical data. The featured articles cover significant aspects of the Indian economy, including its current state, financial stocks and flow of funds, and a retrospective and prospective view on India’s deposit insurance system.

I. State of the Economy

Global growth showed resilience in the first quarter of 2024, prompting many central banks to adopt a less restrictive monetary policy due to falling inflation. In India, high-frequency indicators suggest that real GDP growth in Q1:2024-25 is maintaining the pace set in the previous quarter. The early arrival of the southwest monsoon bodes well for agriculture. Headline inflation is gradually easing, driven by a sustained reduction in core inflation, although volatile food prices pose a challenge to the disinflation trajectory.

#### II. Financial Stocks and Flow of Funds of the Indian Economy 2021-22

Authored by Suraj S, Ishu Thakur, and Mousumi Priyadarshini, this article examines the trends in financial stocks and flows during 2021-22 across various institutional sectors in India. Key highlights include:

- Households and financial corporations remained surplus sectors, offsetting the deficits of the general government and private non-financial corporations.

- The Indian economy returned to a net borrower status in 2021-22, reflecting a current account deficit, with reduced net resource flows from other depository and financial corporations.

- Net financial wealth of the domestic sector moderated to 29.8% of GDP by the end of March 2022, still above the pre-pandemic level of 23.8% in 2019-20.

- Household net financial wealth stood at 93.5% of GDP by March 2022, higher than the pre-pandemic figure but lower than the previous year.

#### III. India’s Deposit Insurance @60: Retrospect and Prospect

Written by Ashutosh Yashwant Raravikar, Avijit Joarder, and Anup Kumar, this article reflects on the 60-year journey of India's deposit insurance system, its achievements, and future directions. Key highlights include:

- Global expansion of deposit insurance coverage, especially post-global financial crisis.

- Major milestones in India include enhanced coverage limits, faster claim settlements, and robust deposit insurance fund management.

- The Reserve Ratio is projected to rise steadily.

- Future goals encompass alignment with international principles, faster claim settlements, proactive treasury management, modernization of infrastructure, and enhanced public awareness on deposit insurance.

The opinions expressed in the Bulletin articles are those of the authors and do not necessarily represent the views of the Reserve Bank of India.