Shaktikanta Das warns banks to remain vigilant of the macroeconomic situation


New Delhi: Shaktikanta Das, Governor of the Reserve Bank of India (RBI), met with managing directors and CEOs of public and private sector banks on November 16 and gave them advice on how to monitor the macroeconomic situation as it changes. , including any global ramifications.

In a press release from the central bank, Das also urged bankers to take precautionary measures to minimize the potential impact on their balance sheets and reduce risks to financial stability.

The topic of discussion among major central banks and all over the world has been inflation. Prior to Russia’s invasion of Ukraine in late February, inflation had already been high, but the turmoil that followed, particularly with regard to grains and energy-related commodities, added to inflationary pressures.

In addition, the fall of the rupee below 80 against the dollar led to a rise in inflation. Shaktikanta Das stated in his September 30 Monetary Policy Speech that “we are in the midst of a third major shock – a storm – arising from aggressive monetary policy actions” and more aggressive communications from advanced economy central banks.” Das has claimed that negative externalities through Global fallout in a fully connected global financial system.

The COVID virus has completely cured the banks, and the economy is starting to show signs of improvement. Consumer spending has increased again, credit growth has accelerated, and banks are now much more efficient at debt collection. Banks are simultaneously trying to collect deposits as a result of diminishing liquidity in the banking system.

In his opening remarks today, Das acknowledged the critical role played by commercial banks in promoting economic growth during the turbulent periods following the onset of the pandemic and continued instability in financial markets. According to the press release, Das mentioned that despite the difficulties, the Indian banking industry has remained “resilient” and has continued to make progress in a number of performance metrics.

RBI reported that the topics covered during the meeting included slow growth of deposits compared to increase in credit, asset quality, investments in IT infrastructure, adoption of cutting-edge technology solutions, operation of digital banking units, etc.

Deputy Governor MK Jain and a few senior RBI officials attended the discussions.

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