Governor Shaktikanta Das said on Friday that India’s financial landscape is changing structurally, and the Reserve Bank of India (RBI) is encouraging innovations to make it more inclusive. Das cited deposit mobilisation and fraud as issues being monitored.
He said at the ‘Modern BFSI Summit 2024’ in Mumbai, organised by Financial Express newspaper, that the slow growth of deposits could expose the financial system to structural liquidity issues. Regulatory actions are emerging in response to such challenges.
He described the lag in deposit mobilization relative to credit growth as a “critical issue” and urged banks to focus on solid credit underwriting.
He cited increased digital fraud, particularly those involving so-called mule bank accounts. According to him, the RBI is monitoring accounts that exhibit unusual activity at odd hours or that show sudden volume increases in previously inactive accounts. He urged banks to improve their monitoring systems to detect and prevent fraud.
Das stated that the increasing share of retail portfolios poses potential risks. The RBI has taken steps to mitigate these risks, focusing on delinquencies and limits on small unsecured loans, which continue to be a source of concern. He said that excessive interest rates on microfinance loans were also raised as a major concern.
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