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Observing at banks’ business models carefully: Das

By Consultants Review Team

Friday, 28 April 2023

governorGovernor Shaktikanta Das declared the Reserve Bank is having a closer look at domestic lenders’ companies as it appears that poor strategies can trigger a crisis.

The Governor of the Indian central bank also said the recent developments in the US, which has seen the implosion of lenders like Silicon Valley Bank and a rush to limit the contagion of stress across the system, maybe because of poor business models.

He said Indian banks have been able to stay resilient and have not been impacted adversely by the “recent sparks of financial instability seen in some advanced economies” courtesy the work done in this aspect by RBI and the banks themselves.

“The recent developments in the US raise a question whether the business model of individual banks that have faced challenges whether the business models were right,” Das said.

“The RBI has started looking at the business models of banks more closely … deficiencies (in it) can spark a crisis,” Das said, speaking at the inaugural global conference on financial resilience organized by the College of Supervisors which the central bank started last year.

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