Further RBI stated that, among the developing countries the extent of rating penetration in India has been increasing every year and a large number of capital issues of companies have been rated.
The RBI also mentioned that in the current scenario, banks are constantly pushing the frontiers of risk management. Compulsions arising out of increasing competition, as well as agency problems between management, owners and other stakeholders are inducing banks to look at newer avenues to augment revenues, while trimming costs.
Consolidation, competition and risk management are no doubt critical to the future of banking but governance and financial inclusion are also likely to emerge as the key issues for a country like India, at this stage of socio-economic development said RBI.
Meanwhile, with increasing liberalisation in the financial sector and the emergence of financial conglomerates, the sectors stability has emerged as a key objective for the regulator.