Categories: Business

Financial system sound, banks should not be extremely risk averse says RBI governor

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RBI Financial Stability report

new Delhi. Reserve Bank of India Governor Shaktikanta Das has said that the country's financial system is strong, but banks should not be excessively vigilant to avoid risk in the Kovid-19 epidemic and beyond. In the Preamble to the Biennial Financial Stability Report (FSR), Das wrote that the top priority at this time for banks and financial market entities should be to increase and strengthen their capital levels. He said, "Risk management should be strong in the changing environment, but the consequences of excessive efforts to distance risk will be adverse for everyone." Das's statement came at a time when the pace of loan disbursement declined. is.

The Governor said, "India's financial system is strong, but in the current environment it is also important that financial market units go ahead and improve and strengthen their capital position. This is a top priority for them, ”he said. He said that the stability of the financial sector is the most essential for building trust of companies, investors and consumers. Along with this, he said that we have to monitor and remain focused. Das said that the governments, central banks and public agencies of various countries have made coordinated efforts and built trust to end the financial pressure. These measures led to stability in the financial system and markets. However, he said that the scenario of the financial system and markets is quite uncertain.

Referring to the strong surge in stock markets during the pandemic, Das said that the Financial Stability Report has come at a time when some segments of the financial markets and real sector activities are falling apart. The Reserve Bank Governor said, "This epidemic in India has come at a time of declining growth rate. Its spread globally has worsened the situation in the demand and supply chain. "However, he said that after the nationwide bandh, there are signs of improvement in the situation gradually. He said that the challenge going forward would be to maintain long-term stability of the financial system. This is necessary for recovery. He said that the concessions given to Kovid during the last few months in the latter world would have to be focused on the withdrawal. Das asked financiers to re-assess their business models and the property market so that the new 'normal' could shield themselves without any hindrance. He said that continuous monitoring is necessary in view of infection risks. The governor said that IT forums have functioned better in times of social distance and the gains it has received should be further strengthened. Along with this, he clarified that there is no scope for any softening on the cyber security front.

This post was published on July 25, 2020 6:04 am

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