Banks need to be extra careful and vigilant: RBI Guv Das
Noting the good performance of the Indian banking system in spite of various negative global developments, Reserve Bank of India Governor Shaktikanta Das stressed that in times like these, banks need to be extra careful and vigilant.
The governor held meetings with the CEOs and CEOs of public sector banks and choose private sector banks On Tuesday in Mumbai.
Strengthening governance
Das stressed the need for executive directors and executives to pay special attention to strengthening the governance of banks and focus on the base of banking stability, which consists of compliance, risk management and audit functions.
The issues were related to enhancing credit underwriting standards, monitoring large exposures, implementing external benchmark linked rate (EBLR) guidelines, strengthening IT security and IT governance, improving recovery from written-off accounts, and sharing accurate and timely information with credit information companies. It was also discussed, according to an RBI statement.
In his latest Financial Stability Report, the Governor emphasized that India’s financial sector has been stable and resilient, as reflected in sustained growth in bank credit, low levels of non-performing assets, and adequate capital and liquidity precautions. The balance sheets of the banking and corporate sectors have been strengthened, creating a “double balance sheet advantage” for growth.
As the recent banking turmoil in some advanced economies (AEs) indicates, new risks have necessitated a reassessment of global standards on financial sector regulations.
“While international cooperation between regulators on these issues is of paramount importance, as far as India is concerned, both regulators and regulated entities need to stay the course with an unwavering commitment to ensuring a stable financial system. We must remember that seeds of weakness are often sown in times Good is when the risks are overlooked,” Das said in his introduction to FSR.
He also attended meetings with the heads of banks, Deputy Governor Eng. Rajeshwar Rao and Swaminathan J, along with a few senior officials of the Reserve Bank of India.