RBI to keep reviewing banks' asset quality, deputy governor says

MUMBAI (Reuters) - The Reserve Bank of India (RBI) will continue reviewing the asset quality at commercial lenders this financial year, Deputy Governor R. Gandhi said on Tuesday, as part of "a continuous process" aimed at avoiding an increase in levels of distressed debt.

The central bank late last year announced a more formal process of reviewing asset quality at lenders for the year that ended in March 2016.

Gandhi said reviewing asset quality would continue even this year though he did not specify whether it would be under the same process carried out in the last financial year.

"It is not that we will not assess the quality of the assets of the banks hereafter," Gandhi told Reuters in an interview as part of the Reuters Financial Regulation Summit in Mumbai

Reviewing asset quality "is a permanent process of supervisory action," he said.

(Reporting by Suvashree Dey Choudhury and Devidutta Tripathy; Editing by Rafael Nam and Richard Borsuk)