RBI strengthening financial system amid challenges: Governor Malhotra

Central bank's role has expanded significantly beyond initial mandate, he says

The next decade would be crucial for the country’s financial architecture and the Reserve Bank of India (RBI) will take all necessary steps to improve India’s financial system by expanding access, enhancing efficiency, and strengthening resilience in an evolving economic landscape, Sanjay Malhotra, Governor, RBI said on Tuesday.

 

He said that RBI will also focus on improving customer services and strengthening consumer protection.

 

“Today, we stand at the confluence of tradition and transformation where the imperatives of price stability, financial stability and economic growth intersect with rapid technological advancements, global uncertainties, challenges of climate change and increasing public expectations,” Malhotra said at the commemoration of the 90th anniversary of RBI.

 

Commenting that the next decade will be crucial in shaping the financial architecture of the Indian economy, he highlighted that RBI will remain committed to expanding and deepening financial inclusion in the country.

 

Under the financial inclusion programme, over 551 million bank accounts have been opened so far. According to the RBI’s Financial Inclusion Index, the extent of financial inclusion in the country stood at 64.2 in March 2024, up from 60.1 in March 2023, and 43.4 in 2017. The index is based on three sub-indices, access, quality, and usage.

 

Striking the right balance 

 

“It will be our endeavour to optimise our regulatory frameworks by balancing the interests of financial stability and efficiency,” Malhotra said.

 

In the past, Malhotra has emphasised that the RBI would strive to strike the right balance between the benefits and costs of every regulation.

 

“We will continue to support technology and innovation. We shall remain vigilant, adaptive and forward-looking,” the governor said, adding that the central bank will collaborate effectively with all stakeholders, governments and financial sector regulators, among others.

 

The journey ahead

 

Malhotra also emphasised that RBI’s adoption of new technologies and modern regulations will be guided by core values of integrity, transparency, and commitment to public service.

 

According to Malhotra, the journey ahead for RBI demands continuous adaptation and agility, fresh thinking and innovation, collaboration and coordination and an unwavering commitment to excellence and perfection.

 

“We at the Reserve Bank remain fully prepared to meet all challenges and seize all opportunities,” he said, adding that the trust that the people of India repose in the Reserve Bank is their greatest asset and RBI is determined to preserve it and further strengthen it in the years ahead.

 

“We at the Reserve Bank remain fully prepared to meet all challenges and seize all opportunities,” Malhotra added.