The Reserve Bank of India (RBI) governor Urjit Patel has said that the nationwide Goods and Services Tax (GST) and legislation of bankruptcy code should impart resilience to the economy.

The governor in his Financial Stability Report published by the RBI said that the withdrawal of specified bank notes will impart far reaching changes going forward.

“With respect to demonetisation, it is expected to significantly transform the domestic economy in due course in terms of greater intermediation, efficiency gains, accountability and transparency through increasing adoption of digital modes of payments, notwithstanding the short-term disruptions in certain segments of the economy and public hardship,” added Patel.

Raising concerns about stress in the banking sector, he said “While the domestic banking sector continues to face significant levels of stress partly reflecting legacy issues, on balance, enhanced transparency has helped to reinforce the stability of India’s financial system.”

Adding to this he said that the global financial crisis has prompted regulators to require banks to undertake stress tests to see if their risk appetite matches their risk taking capacity.