Banks should strengthen operational standards and risk management: RBI Governor, Shaktikanta Das

Mumbai. Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday asked banks to further strengthen operational standards, risk management activities and compliance culture. Das said this in meetings with managing directors (MDs) and chief executive officers (CEOs) of public sector banks and select private banks. These meetings were held as part of the Reserve Bank’s initiative to keep in constant touch with the top management of the institutions under the purview of the RBI. The Reserve Bank said in a statement that the Governor in his opening speech noted the continuous improvement in the asset quality, loan provision, capital adequacy and profitability of the banks.

RBI said, while acknowledging the strength in the banking sector, Das emphasized the importance of further strengthening the working standards, risk management activities and compliance culture in banks. The meeting discussed in detail the gap between loan and deposit growth, liquidity risk management, issues related to asset and liability management (ALM) and trends in unsecured retail loans. Das also emphasized the need for banks to ensure strong cyber security controls and effective management of third party risks.

According to the statement, the RBI Governor asked the banks to curb mule accounts opened for the purpose of illegal transactions and to intensify customer awareness and education initiatives to prevent digital fraud. Apart from this, cyber security, third party risks and digital fraud, credit flow to MSMEs, increasing the use of Indian rupee for cross-border transactions and participation of banks in the innovation initiatives of the Reserve Bank were also discussed in detail. Deputy Governors M Rajeshwar Rao and Swaminathan J along with executive directors in charge of regulation and supervision functions also attended the meeting. The last such meetings were held on February 14, 2024.

Disclaimer: CricketInFocus has not edited this news. This news has been published from PTI-language feed.

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