RBI Dy Guv Michael Patra

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RBI Deputy Governor Michael Patra. (File photo)

New Delhi: Reserve Bank of India (RBI) Deputy Governor Michael Patra says India will equal Germany’s GDP (just over $4 trillion from 2021) and become fourth largest economy by 2025-26 and by 2027, India will overtake Japan (about $5 trillion GDP) and become the third largest economy.

He added that India – already the world’s fifth largest economy ahead of the UK (nearly $3.2 trillion in GDP) – is driving global growth with the second largest contribution to growth. world in 2022.

“India’s population will become the largest and youngest in the world next year. It will demand the best financial intermediation services in the world,” the central bank deputy governor said at a recent RBI event.

Last month, the International Monetary Fund (IMF) predicted that Germany, Europe’s largest economy, and Italy would enter recession next year. According to the IMF’s World Economic Outlook, Germany’s economy is expected to contract by 0.3% in 2023. The global lender has forecast India’s GDP to grow by 6.8% as tight monetary conditions slow growth to 6.1% in 2023. FY24.

The deputy head of the RBI said banks will play a vital role in this transformation.

“The reach and breadth of the banking network has improved the mobilization of financial resources in the economy,” he said, adding that the number of deposit accounts per thousand inhabitants rose to more than 1,600 from 43. in 1972.

The share of small loans (up to Rs 10 crore) in total loans increased from 45% in 2014 to 60% in 2022, Patra said in his speech at an internal RBI conference.

He added, “We now have one commercial bank branch for 9,000 citizens, a far cry from one branch for 40,000 citizens in 1972. Commercial banks maintain about 2.25 lakh customer service points, of which more than 1, 75 lakh ATMs.”

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