Reserve Bank of India (RBI) Governor Shaktikanta Das has asked banks to take proactive measures to strengthen their resilience and lending capacity by raising capital and making provisions. In a two-day meeting with the chiefs of public sector banks and select private sector banks, he also discussed the monetary policy transmission and liquidity situation. “Credit flows to different sectors of the economy including stressed sectors and MSMEs also came up,” the RBI said in a statement after the meeting.
The meeting, held through video conference, was attended by Deputy Governors of the RBI. The progress in the implementation of resolution framework for Covid-related stressed assets was also discussed.
Das touched upon the current economic situation and emphasised the importance of the banking sector in supporting the ongoing revival. With specific reference to the financial sector, he highlighted the steps taken by the RBI since the onset of the pandemic to stabilise the economy and to ensure financial stability.
On the banking sector, he reiterated the need for banks to remain vigilant and take proactive measures to strengthen their resilience and lending capacity by raising capital and making provisions proactively.
RBI officials and bankers also made an assessment of the current economic situation and outlook. Other issues that came up in the meeting included progress in making the identified districts in states and UTs 100 per cent digitally enabled, strengthening and enhancing the capacity and efficiency of the IT infrastructure and IT systems in banks, and improving grievance redress mechanisms in banks.
The Monetary Policy Committee had mentioned about the “noteworthy development” of non-food credit growth getting accelerated and moving into positive territory for the first time in November 2020 on a financial year basis. Hitherto, the large inflow of deposits into the banking system was being predominantly deployed in SLR investment.
Digital lending: RBI warns against unauthorised apps
Mumbai: The RBI on Wednesday cautioned consumers against digital money lending entities that promise loans in seconds at exorbitant rates of interest and then use high-handed recovery methods.
According to the RBI, there have been complaints about individuals and small businesses falling prey to growing number of unauthorised digital lending platforms. “These reports also refer to excessive rates of interest and hidden charges being demanded,” it said.