Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that the country’s banking system “continues to be sound and stable” during the coronavirus pandemic.

“We have not exhausted our ammunition, whether on rate cuts or other policy actions,” Das told news agency PTI. He added that being overly risk-averse is self-defeating for banks.

Das said that after the pandemic is contained, a careful trajectory needs to be followed for unwinding. He hoped that the financial sector will return to normalcy.

“By no sense should it be assumed that RBI will unwind the measures soon,” the central bank’s governor clarified.

“Once there is clarity on Covid-19 curve and other aspects, the RBI will start giving its estimates on inflation and growth,” said Das.

Das had held a three-day brainstorming session of the Monetary Policy Committee (MPC) earlier this month (August 4-6) after which the bank opted for a status quo and left interest rates unchanged.

According to minutes of the meeting released last week, Das had emhasised that although there is headroom for further monetary policy action, the “arsenal” has to be kept dry and used judiciously for promoting growth which has been hit hard by the Covid-19 pandemic.

However, the MPC maintained an accommodative stance, implying more rate cuts in future if the need arises to support the coronavirus-hit economy.

Committee members extensively discussed potential challenges from stubborn retail price inflation, which has stayed above RBI’s tolerance band for nearly three quarters. The panel also discussed possible supply-side shocks from lockdown-related disruptions, before deciding to continue with the accommodative stance to nurture an economic recovery.

India’s retail inflation accelerated to 6.93% in July from 6.23% in June, remaining above the MPC’s target range of 2-6%, while food inflation rose to 9.62%.