Kotak Mahindra Bank CEO Uday Kotak said on Thursday said that with macro factors turning positive, India can "navigate well" the current turmoil in the global financial market and stand out. India, he said, will benefit from low oil prices in the international market and the country's current account deficit (CAD) is expected to decline to below 2 per cent in 2003-24.
The global markets have roiled over the last week after two banks in the United States went belly up. "Even as the global turmoil continues in financial markets, the macro factors are turning better for India. The current account deficit looks below 2.5 per cent in FY 23 and going below 2 per cent in FY 24. Lower oil helps. If we walk our talk and navigate well, India can stand out in this turbulence," Kotak tweeted.
Signature Bank, New York, which lent mostly to the crypto industry, was shut down by the regulators on Sunday after there was a run on their deposits. Besides, the failure of Silicon Valley Bank last week left many startups, tech companies, entrepreneurs and VC funds nervous and jittery. SVB, the 16th largest bank in the United States, was closed last Friday by the California Department of Financial Protection and Innovation, which later appointed the FDIC as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups. Its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis. The bank failed after clients -- many of them venture capital firms and VC-backed companies that the bank had cultivated over time -- began pulling out their deposits, creating a run on the bank.
Chief Economic Advisor V Anantha Nageswaran on Thursday said global uncertainty has been rising after the recent developments in the United States and governments, businesses and individuals should keep 'margins of safety' in fiscal, corporate and savings account planning.
He said the global growth estimates of the International Monetary Fund (IMF) given in January look outdated, and countries will have to watch what the developments in the US over the last week would do to confidence, bank lending growth and the subsequent chain effects.