📷 Image Credits: The Times of India
In a recent address, RBI Governor Shaktikanta Das emphasized the importance of banks focusing on managing risks to keep the financial system resilient. Das highlighted the need for banks to prioritize robust risk mitigants that ensure long-term success and overall financial system resilience. He mentioned that the RBI has strengthened its supervisory systems and taken proactive measures to prevent crises.
Das also stressed the significance of ethics in governance, advising banks to avoid a “mindless pursuit of bottom lines.” This call comes at a time when Indian banks have seen record profits, with the combined net profit of public and private sector banks surpassing Rs 3 lakh crore.
Furthermore, the Governor urged financial institutions to leverage emerging technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics to manage risks effectively. These technologies can enhance predictive analytics, improve fraud detection, and enhance operational efficiency through automation of routine tasks.
Das addressed the issue of unsecured loans, stating that timely action in moderating their growth has been imperative. He emphasized the need for supervision to anticipate and prevent crises, acknowledging the complexity of the financial landscape. The Governor expressed confidence in the Indian financial system’s current state compared to during the Covid pandemic.
In conclusion, Shaktikanta Das’s call to banks echoes the importance of sustainable business models, risk management, and ethical governance in ensuring financial resilience and stability in the Indian banking sector.
