Has taken number of steps to strengthen resilience of Indian banks: RBI Guv

Mumbai (Maharashtra) [India], February 8 (ANI): Reserve Bank of India’s Governor Shaktikanta Das on Wednesday said the central bank has issued a press statement on banks’ exposure to a “particular conglomerate.” He said he had nothing more to add to an earlier statement.

While addressing media queries during a press conference after the announcement of the Monetary Policy’s outcome, he said RBI has taken a number of steps to strengthen the resilience of Indian banks and it has set guidelines on risk management committees and made it mandatory to appoint a chief risk officer (CRO) and chief compliance officers (CCO). An RBI statement released on February 3 said as per the RBI’s current assessment, the banking sector remains resilient and stable.

Speaking about banks’ exposure to corporate, he said, “Banks don’t lend on the basis of market cap of the company; banks lend on the basis of the strength of a company and its cash flows.”
The RBI MPC, led by Governor Shaktikanta Das, hiked the repo rate by 25 basis points to 6.5 per cent on Wednesday. The press conference of the mediapersons happened after the announcement of the outcome of the MPC meet.

According to the governor, a rate hike of 25 basis points is considered as appropriate at the current juncture. “The reduction in the size of the rate hike provides the opportunity to evaluate the effects of the actions taken so far on the inflation outlook and on the economy at large,” he added.
Das-headed Monetary Policy Committee (MPC) started its three-day meeting on February 6 amid the rate hiking spree that started in May last year to check inflation.

The Monetary Policy Committee consists of three RBI officials and three external members who are appointed by the central government. This week’s monetary policy was seen as crucial as it was the RBI’s first policy stance for the calendar year 2023 and came exactly one week after Union Finance Minister Nirmala Sitharaman unveiled the Union Budget 2023-24 in the Parliament on February 1.