RBI flags governance gaps, instances of stressed assets misreporting

The Governor of the Reserve Bank of India said on Monday that some banks have tried to hide the true status of their stressed assets while management gaps have been noticed in some lenders.

said Shaktikanta Das during his inaugural address to bank managers at a conference organized by management RBI.

Das said despite the guidelines on corporate governanceIt was a matter of concern that the Reserve Bank of India has faced loopholes in governance in some banks, which has the potential to cause some volatility in the sector.

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“While these gaps have been mitigated, it is imperative that boards and departments do not allow such gaps to creep in,” he said.

Das said excessive growth, under-pricing or over-pricing of products on both the credit and deposit sides, and concentration or lack of sufficient diversification in the deposit/credit profile could expose banks to higher risks and vulnerabilities.

“The RBI engaged with some banks on the need to make appropriate adjustments in their business strategies as it was observed that excessive growth in certain business sectors was creating avoidable vulnerabilities,” Das said.