Reserve Bank of India (RBI) deputy governor Swaminathan J has urged public sector banks (PSBs) to safeguard their strengthened capital and asset quality, calling for forward-looking buffers and proactive stress management.
He has suggested that PSB consider using shared technology platforms and jointly develop digital infrastructure to leverage economies of scale and reduce costs. “They can also experiment with what is known as a digital twin, a virtual model that mirrors a real process… By testing changes on the digital twin first, banks can identify bottlenecks and improve efficiency before making changes in the real world.”
What did Swaminathan J say?
“Banks should hold forward-looking capital buffers that reflect their risk profiles and growth ambitions, rather than simply complying with regulatory floors. Asset quality must also be managed with a preventive mindset, using early warning systems and predictive analytics to identify stress before it becomes a crisis,” he said at the PSB Manthan 2025 on September 12. His speech was uploaded on the RBI website on Tuesday.
What are the five pillars for PSBs as per RBI deputy gov?
He highlighted strong governance, financial resilience, innovation & adaptability, people & culture, and inclusive customer centricity as the five key pillars for public sector banks. “Regulation can guide, but governance must come from within.”
As technology becomes more deeply embedded in banking operations, the deputy governor emphasised, cybersecurity, vendor oversight and business continuity must be integrated into every digital initiative.