RBI Governor Shaktikanta Das Say…
The Reserve Bank of India (RBI) remains alert and committed to act early and decisively to prevent any build-up of risks, said RBI Governor Shaktikanta Das on Thursday.
He stated that the recent implementation of macroprudential measures, aimed specifically at tempering lenders’ enthusiasm in certain segments of retail loans, reaffirms the central bank’s dedication to maintaining financial stability while ensuring the continued availability of funds for the productive needs of the economy.
“We remain alert and committed to act early and decisively to prevent any build-up of risks. Our recent macroprudential measures to curb lenders’ exuberance towards certain segments of retail loans underline our commitment to preserve financial stability without compromising the availability of funds for productive requirements of the economy,” he said in a foreword to the Financial Stability Report (FSR).
After issuing warnings to banks and non-banking financial companies (NBFCs) about the escalating levels of unsecured loans, including personal loans and credit card debt, on November 16 of the current year, the regulator raised the risk weighting for such loans from 100 per cent to 125 per cent. Additionally, a 25 percentage point increase was implemented for the risk weighting of bank loans extended to higher-rated NBFCs.
Das further stated that despite facing global headwinds and emerging challenges such as technological disruptions, cyber risks, and climate change, the commitment of the central bank is unwavering. The focus remains on fortifying the financial system, encouraging responsible innovation, and fostering inclusive growth.
He highlighted that the health of the Indian financial system is on a positive trajectory, marked by multi-year high earnings, a low level of stressed assets, and robust capital and liquidity buffers within financial institutions. Substantial progress has been made since the onset of the Covid-19 pandemic in steering both the economy and the financial system. Now, it is crucial to consolidate these achievements, propelling the economy toward a higher growth trajectory while maintaining macroeconomic and financial stability.
This Article Written By Khabar Khzana