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RBI Governor Shaktikanta Das: Slow Credit Off-Take The Biggest Challenge For Banks

RBI Governor Shaktikanta Das

Reserve Bank of India (RBI) governor Shaktikanta Das delivered the keynote address at the 13th Mint Annual Banking Conclave (ABC) which is themed on the role of the Indian banking sector in shaping the $5 trillion economy challenge.

RBI Governor Shaktikanta Das Speech Updates:

-RBI governor on farm loan waiver: Any kind of generalised loan waiver is credit negative and undermines credit culture. It affects the farmers’ capability to access the loan for the next time. Relief to farmers should ideally be targetted and specific to certain situations. It is very important that the amount of write-off is released immediately to banks.

-Flow of credit to NBFCs has stabilised: Das

-We expect to have an integrated framework for resolution of financial firms operating in India in the near future: Das

-2019 was a very unusual year but there are some green shoots visible: Das

-We take CSO data and have no reason to doubt the credibility of the data

-In terms of recent progress, the Indian banking sector is slowly turning around on the back of improvements in asset quality with enhanced resolutions through the Insolvency and Bankruptcy Code (IBC).

-Banks are not only facing competition from fintech companies but also from large technology companies (Big Techs) which are entering into financial services industry in a big way: Shaktikanta Das.

-The overhang of non-performing assets (NPAs) remains relatively high which is weighing on credit growth.

-We started cutting the rates from last February. We acted in time: Das.

-If required then only we approach the government: Das

-There are no preconceived ideas or conclusions on the roadmap on monetary policy: Das

-Our regulation will not be an impediment in the growth of a bank

-Banks would have to strive hard to stay relevant

-Banks have to focus on two critical aspects: creating the required HR skills (training, skilling and reskilling) and investing more on technology.

-Banks will have to respond to emerging challenges.

-The business of banking has become all the more challenging now: Das

-It is very important for banks to focus on their operational efficiency: Das

-Prudent lending doesn’t mean you stifle your lending: Das

-Slow growth of credit is the biggest challenge which the banks face

-Focus should be on prudent lending: Shaktikanta Das.

-Credit growth has moderated to 7-7.5% this year. It needs to improve and we have taken steps: Das

-The most critical challenge for banks all over the world is slowing credit off-take. It affects profitability of the banks: RBI Guv.

-Governance is the critical thing that differentiates between a well performing bank or NBFC from a not so well performing bank or NBFC.

-Regulations, supervision has to be robust. The idea is not to create unnecessary impediments in the operations of banks: Das

-There has been a shift from reactive to proactive approach: Das

-Top 50 NBFCs are being very closely monitored by the RBI. The next 50 NBFCs are also being monitored: RBI Governor.

-We propose to undertake thematic studies across financial entities: Das

-When you do supervision, you cannot focus on just one bank.

-RBI has reorganised the regulatory department

-Our regulations are in compliance of Basel-III guidelines: Das

-Paradigm shift in banking sector due to digital banking revolution.

-The topic of my speech is banking landscape in the 21st century: Das

-RBI Governor Shaktikanta Das is the chief guest at Mint Annual Banking Conclave.

SOURCE: bit.ly/2PmnKPr

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