In its second financial stability report, the Reserve Bank of India said that the Omicron variant of coronavirus remains the major challenge along with rising inflation pressures.

RBI Governor Shaktikanta Das said that after the destructive second wave in April-May 2021, the growth outlook has progressively improved, though there are headwinds from global developments and more recently from the Omicron virus. He further added that a stronger and sustainable recovery hinges on the revival of private investment and shoring up private consumption, which unfortunately still remain below their pre-pandemic levels.

A stronger and sustainable recovery hinges on the revival of private investment and shoring up private consumption, which unfortunately still remain below their pre-pandemic levels, he adds.

Noting that the financial institutions have remained tough during the pandemic and stability prevails in the financial markets shielded by policy and regulatory support, Das is confident that the strong balance sheets of banks with higher capital and liquidity buffers will help lessen future shocks.