Remain watchful of recent geo-political developments: RBI Governor to banks

Urges lenders to take appropriate measures, including raising of capital, to shield their balance sheet against any potential impact these events might have

The Reserve Bank of India (RBI) Governor Shaktikanta Das in meetings with the chiefs of select public and private sector banks advised them to remain watchful of the recent geo-political developments and take appropriate measures, including raising capital, to shield their balance sheet against any potential impact of these events.
 
The governor asked the banks to provide necessary support to the ongoing revival of economic activity, among other things, in the meetings held on May 17, and 18. The banks have also been asked to pay attention to the grievance redressal system for further improvement.
 
The meetings with the top bankers were attended by deputy governors’ M K Jain, M Rajeshwar Rao, and a few senior officials of the RBI as well.
 
“In his introductory remarks, the governor noted the key role played by the banks in supporting the economy throughout the pandemic. He further stated that the banking sector has remained resilient and has continued to improve despite facing various headwinds”, the RBI said. The governor also discussed issues such as credit off-take, outlook on asset quality, collection efficiency, setting up of digital banking units, resilience of IT infrastructure, and cyber security defences in banks with the bank chiefs.
 
Incidentally, non-food credit growth in the banking system has picked up after bottoming out in FY21 and stood at 11.1 per cent year-on-year during the fortnight ended April 22. And banks have come out of the pandemic relatively unscathed as they shored up their capital base. In the past, the governor has praised the increasing resilience of the banking sector in India by pointing out declining bad loans, higher capital, and an improved capital adequacy ratio.