Regulating crypto assets along with digital currency, addressing the remaining regulatory concerns in the banking sector, and integrating with the global economy are among the few mid-term structural issues for India, a top official from the International Monetary Fund has said.

Overall, the IMF is looking at India in “a very positive fashion,” Tobias Adrian, Financial Counselor and Director of the Monetary and Capital Markets Department told PTI on Tuesday.

”I think there are many opportunities and growth (in India is coming back). There’s a recovery. There’s a lot of excitement around new growth opportunities, new developments,” he said on the sidelines of the annual spring meeting of the IMF and the World Bank.

”We always value that growth is inclusive, and is touching all of the people. But our general outlook in India is a fairly positive one,” he said.

Adrian said that “regulating crypto assets is certainly high on the agenda” for India when it comes to mid-term structural issues that the country needs to address in the coming years.

That is something that is done globally. Within the financial stability board, we are trying to come up with global standards for crypto-asset regulations. I think that’s important for India to also adopt. Of course, I know that India has changed the taxation of crypto assets and that’s a welcome move,” he said.

”Secondly, India is exploring central bank digital currencies. That could be quite important for financial inclusion and financial development, and we are watching very closely what India is doing. We welcome those policy developments as well,” the IMF official said.

Noting that financial markets and financial institutions are key to growth and economic development, Adrian said addressing the remaining regulatory concerns in the banking system and the non-bank system is also very important.

”Finally, I would argue that being part of the global financial system and being part of global trade is very beneficial to India. India can export many products, it can import products, it can raise capital externally, it can fund projects externally as well, there are Indian investments all over the world,” he said.

”In our assessment, this integration, globally, of economic and financial ties is very beneficial and has lifted hundreds of millions of people out of poverty in recent decades. So, we welcome it very much and we think it’s important for India to continue down the path,” he said.

Earlier during a news conference here, Adrian told reporters that In India they have seen an increase in sovereign debt as the government has deployed expansionary fiscal policies during the pandemic.

”We also saw an increase of holdings of banks of this sovereign debt. However, the fiscal situation in India is sustainable. Furthermore, the level of sovereign debt on the banks that we are seeing is also leaving us at comfort, so we are not alarmed at this point,” he said.

”Having said that, there are many other countries where we do worry about this interaction between sovereign risk and banking sector exposures, but India is not one of them,” Adrian said.

Ranjit Singh, Assistant Director of the Monetary and Capital Markets Department, said that the situation concerning India is certainly one that is manageable.

The level of bank holdings of sovereign debt in India is actually at about 29 percent, and this is on average higher than the emerging market figure of 16 percent. And India’s public debt-to-GDP ratio is at about 87 percent, he said.