Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday cautioned banks that the tendency to avoid risk excessively would be detrimental to them and would not be able to earn even if they did not do their basic work. Das, addressing a web seminar said that instead of avoiding lending, banks should improve their risk management and administrative structure and bring sufficient flexibility in themselves. Amid reports of a slowdown in debt growth, Das said, “The tendency to avoid risk excessively may lead to loss of its own, banks will not be able to earn.”
Debt growth is necessary to accelerate the economy. Bankers remember the past experience and in order to keep the debt from deteriorating, they insist that they should be saved only by giving loans. Das said that there is enough scope for the bank to improve its ability to prevent frauds so that they can quickly identify vulnerabilities.
The RBI governor said that overall the banking system remains strong and stable and lenders will have to develop a new model of growth in the times to come. He said that the RBI will withdraw the measures related to the Kovid-19 epidemic, but it will not happen soon. He said that the government has taken steps against the pandemic at the financial level with a lot of responsibility, understanding and thinking.
