You are here: Home » Finance » News » Banks
Business Standard

Be vigilant to vulnerabilities: RBI governor Shaktikanta Das to banks

The RBI data showed that credit growth is improving, albeit at a slower pace

Shaktikanta Das | Reserve Bank of India | Banking sector

Abhijit Lele & PTI  |  Mumbai 

RBI Governor Shaktikanta Das
RBI Governor Shaktikanta Das | Photo: Bloomberg

RBI Governor on Tuesday asked to remain vigilant to any emerging signs of vulnerabilities and take timely steps to mitigate the risks.

In a statement, the (RBI) said the governor held separate meetings in virtual mode with managing directors (MDs) and chief executive officers (CEOs) of public sector and some private sector (PSBs).

In his opening remarks, Das acknowledged the improved financial and operational resilience of the that imparts strength to financial stability. He, however, emphasised the need for banks to continue providing necessary support in the revival of economic activity.

Bankers aware of deliberation said heads of PSBs explained that the economic upturn outlook for credit expansion is better. They have taken steps to scale up credit through outreach programmes across states.

The RBI data showed that credit growth is improving, albeit at a slower pace. Banking systems loans expanded by 6.5 per cent year-on-year, till October 8, up from 5.7 per cent a year ago.

The governor also advised the banks to maintain the stability of not only the institutions themselves but also of the overall financial system.

Several other matters, including credit flows, especially to micro and small enterprises, were also discussed during the meetings.

According to the statement, discussions also took place on matters like outlook for stressed assets and measures for mitigation, pricing of risks, collection efficiencies and engagement of banks with fin-tech entities.

Bankers said the collections from regular and recoveries from bad loans have shown improvement. The incremental stress is expected to be lower due to emergency credit support and restructuring schemes. Also, the capital adequacy and provisioning for existing bad loans is comfortable.

CARE Ratings in review of Q2FY22 results of 23 banks said the asset quality situation of the Indian banking system does indicate a gradual improvement in the NPA ratio in September. For these 23 banks (nine PSBs and 14 private banks), gross non-performing assets (NPAs) have declined to 6.97 per cent from 7.21 per cent in March.

The implementation of certain regulatory measures for ensuring consumer protection were also taken up in the meeting. Asked if issue former SBI chairman Pratip Chaudhuri’s arrest came up for discussion, bankers said such a matter did not crop up in interactions.

RBI Deputy Governors M K Jain, M Rajeshwar Rao, and T Rabi Sankar also attended the meetings.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 02 2021. 23:39 IST