RBI Governor: RBI Governor Shaktikanta Das said that it is the most sacred duty of the banks to protect the money of the depositors who have deposited hard earned money and lifetime savings in the banks. The RBI governor said that the safety and soundness of the banking system depends on effective governance, which can protect the interests of all stakeholders, including bank depositors.
sacred duty to protect depositors’ money
Shaktikanta Das said that depositors who deposit money in banks have the largest share in the resources of banks, who keep their lifetime hard earned money and savings with banks. It is the sacred duty of the banks to protect the money of the depositors which is possible only with good governance and there can be no compromise with it.
Warned of cyber threats
RBI Governor has also warned about cyber risk and cyber attack. He said that cyber risk is being projected as the top 10 operational risk in 2023 for global financial institutions. He said that robust IT and information security governance will help in detecting such risks in advance and will help in reducing volatility in operations as well as minimize losses from security-related incidents.
Shaktikanta Das said that banks and other regulated organizations are outsourcing on a large scale these days, and there is a need to adopt concrete policy and practice in this direction. He told that on April 10, 2023, RBI has issued guidelines regarding IT outsourcing for banks, NBFCs and other regulated entities.
Warned banks from global financial crisis
After the banking crisis in America and Europe, the RBI governor has advised banks in the country to be cautious in future. He said that the financial instability in the developed economies has not affected the Indian banking system. This has also been revealed from the results of the stress test conducted by RBI recently. But the governor said that the RBI expects the management and board of directors of the banks to review their financial risk as well as insist on raising more capital than the minimum regulatory benchmark.
Investigation of the business model of banks started
The RBI governor said that it is necessary for the future that the bank remains very strong financially, operationally and as an organization. Maintaining financial soundness requires that banks have sufficient capital to generate earnings despite macroeconomic shocks. Along with this, the bank should be ready to face all kinds of liabilities. Shaktikanta Das said that due to this, RBI has started studying the business model of banks in depth. The governor said that stress tests show that Indian banks will be able to keep the capital adequacy ratio above the minimum requirement even in extreme crisis conditions.