RBI Governor Highlights: Shaktikanta Das asks banks look within and reorient business in the post-covid world

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Updated: August 27, 2020 3:53:00 pm

The Reserve Bank of India Governor Shaktikanta Das stressed on the need for tighter risk management for banks and financial institution as they enter a crucial phase in the post coronavirus world.

Shaktikanta Das will be talking ahead of a discussion between banking industry captains, including State Bank of India Chief Rajnish Kumar and HDFC Bank’s Aditya Puri.

RBI Governor Shaktikanta Das Highlights: The Reserve Bank of India Governor Shaktikanta Das said that banking system needs to reorient business in the post coronavirus world by looking within. Shaktikanta Das said that financial institutions face challenges ahead, nudged by the pandemic, he however stressed that the banking system in India at the juncture is resilient enough. The country’s top money manager said that the banks need to focus on risk management in an effort to trim down bank frauds. Shedding light on the decisions of the RBI during the pandemic, he said that the loan moratorium was a temporary solution to the system. 

The central bank, earlier this month held interest rates due to the rising inflation at its monetary policy committee. In an effort to control the liquidity in the system, the RBI has this week announced another operation twist where it will buy and sell government debt worth Rs 20,000 crore. The first tranche of this buying and selling will happen today.

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Highlights

    13:16 (IST)27 Aug 2020
    Coronavirus poses several challenges for banks and the financial sector

    Talking about the impact of the coronavirus pandemic, RBI Governor Das said that it poses several challenges for financial sector. He added that to battle these challanges proactive action on various fronts needs to be taken, which will enable the system in dealing with these challenges effectively and maintain the soundness of Indian banking system.

    13:02 (IST)27 Aug 2020
    Capital raising needs to be carried forward vigorously by Banks and NBFCs

    After the recent capital raising efforts of private sector banks, Shaktikanta Das said that the process needs to be carried forward vigorously by Banks and NBFCs in both the public and private sector domain.

    13:00 (IST)27 Aug 2020
    The focus of use of technology should shift from ‘transactionsbased’ to ‘business-oriented’

    RBI Governor today said that the quality and ingenuity of technology should match the banking sectors aspirations of acquiring scale and diversion of business across the globe. He stressed on the bankin sector's need to shift technology from ‘transactionsbased’ to ‘business-oriented’. "We have a pocket full of technological tools like big-data, artificial intelligence, machine learning to leverage upon , in order to be able to compete with the global players in reaping the benefits of ‘creativity’ looming large all over," he said. 

    11:29 (IST)27 Aug 2020
    Extreme risk aversion could impact income of banks

    Extreme risk-aversion by banks is defeating practice, said RBI Governor. Shaktikanta Das added that quality of decision of making and building up resillinece is what banks need to deal with. "The problem of frauds is something that banks need to look at," he added.

    11:21 (IST)27 Aug 2020
    Government has been responsible in its announcements: RBI Governor

    RBI Governor said that the government has been responsible in its announcements during the pandemic. Shaktikanta Das added that the measures taken by the government to support the weaker sections of the society have been well placed. "Government has been fiscally very responsible," Das said.

    11:15 (IST)27 Aug 2020
    Our emphasis that financial markets function in an efficient manner: RBI Governor

    Shaktikanta Das said that the role of the central bank is to make sure that the financial markets function in an efficient manner. RBI Governor said that central bank has various avenues at its disposal and it will continue to use them as and when needed.

    11:08 (IST)27 Aug 2020
    RBI waiting for things to cool down before predicting GDP growth

    RBI Governor said that the central bankins is waiting for more clarity on the coronavirus cases curve and once that becomes clear the RBI will pin a number on the GDP growth. 

    11:02 (IST)27 Aug 2020
    Capital infusion to help boost investor confidence

    RBI Governor said that the recent capital raising efforts of the lenders and non-bank finance companies will boost the confidence of not just domestic investors but also of the foreing investors. 

    10:59 (IST)27 Aug 2020
    Financial institutions have to walk a tight rope: RBI Governor

    "The current pandmeic related shock is likelyh to place pressure on bank's balance sheet," said Shaktikanta Das. He added that the financial institutins ahve to walk a tight rope in the post-coronavirus period. The RBI governor said that it will be important to see how the banking space reacts to the challange.

    10:57 (IST)27 Aug 2020
    Banking system has shown resilience during the pandemic

    Lauding the banking sector, RBI Governor said that the banks have maintained operational continutinty during these challangeing times that forced half the world to sit at home. RBI Governor acknowledged that banking sector employees have risked their life in an effort to continue operations.

    10:54 (IST)27 Aug 2020
    Stress test should be integral part of risk management

    Stress tests on assets need to be an integral part of the banking system. Shaktikanta Das said that risk management needs to be more robust for banking as the keep an eye on frauds at various levels.

    10:53 (IST)27 Aug 2020
    Risk management systems need to be robust

    Risk management systems for banks need to be robust enough to detect frauds in an efficient manner, said RBI Governor. Das was stressing on the need for a robust risk management in the banking system.

    10:51 (IST)27 Aug 2020
    Important to keep banking decisions autonomous: Das

    RBI Govenor said that while investors of banks want to have a say in how the lender is run, he stressed that banks an autnomous decision making body for their business to sustain. 

    10:48 (IST)27 Aug 2020
    Consolidation of PSU banks a step in right direction

    The RBI Governor said that the reforms in the banking space need to be reconfigured as he lauded the move to consolidate public sector banks. 

    10:48 (IST)27 Aug 2020
    Banking system is a facilitator of economy, says RBI Governor

    The banking system is a facilitator of the conomy, said RBI Governor Shaktikanta Das. He said that the nature of reforms needs to be reconsidered.

    10:46 (IST)27 Aug 2020
    India's banking system sound and stable

    RBI Governor said that India's banking system is overall sound as he stressed on the need for banks to stand their ground in dealing with challanges such as the current pandemic. He added that Banks need to look at rural sector which according to him is still unexplored. 

    10:45 (IST)27 Aug 2020
    Key to long-term financial stability lies in banks' ability to withstand shocks

    RBI governor said that the banks need to sustain shocks for the long-term financial stability of the system. Das was speaking at the Unlock BFSI 2.0 event. Core of banking is made up of strong management, RBI Governor said.

    10:44 (IST)27 Aug 2020
    We are not going to unwind all measures that we have announced, says Shaktikanta Das

    RBI Governor said that the Reserve Bank of India will not unwind all measures that it has announced. "We are carefully monitoring the stituation, When we enter the post pandemic phase then there has to be a calibrated exit plan," he said. RBI is taking a long-term view of aeverything, he added.

    10:42 (IST)27 Aug 2020
    Moratorum was a temporary solution, says RBI governor

    RBI's effort to maintain stability annd providing relief to businesses during the pandemic. Moratorum was a temporary solution, RBI efforts have been unprecedented, the Governor said.

    10:41 (IST)27 Aug 2020
    Pandemic is keeping the world on the dge,  says RBI Governor Shaktikanta Das

    RBI Governor said that the spread of the pandemic in India continues unabated although the fatality rate is low. The uncertainty of the length pandemic continues to be a cause of worry.

    10:32 (IST)27 Aug 2020
    RBI's operation twist

    RBI will purchase bonds maturing in 2024, 2027, 2030, and 2032 using the multiple price auction method tomorrow. On the other hand, the central bank will sell short term bonds, all maturing in 2020. “By purchasing and selling different maturity bonds, RBI intends to manage the yield curve,” Jaikishan Parmar, Sr Equity Research Analyst, Angel Broking told Financial Express Online. “This will create demand for long-dated bonds and increase the supply of the short term bond. This action of RBI would lead to rising short-term yields and lower long term yields. If long term rates remain lower it will help the Indian economy to revive,” he added.

    10:29 (IST)27 Aug 2020
    RBI’s another Twist; what buying, selling govt debt means for bond yields, liquidity, share market

    The Reserve Bank of India’s decision to buy and sell government debt worth Rs 20,000 crore through open market operations (OMO) brought the 10-year bond yield down on Tuesday but market participants are not convinced in how long it will stay there. The 10-year bond yield closed at 6.15% on Tuesday, down from its 6.22% closing on the previous day. The central bank’s ‘Operation Twist’ is being termed by many as a step in the right direction. “Rs 20,000 crore OMO is a good beginning, but we need more such measures for a substantial and lasting impact,” said Deepak Jasani, Head – Retail Research, HDFC Securities.

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    10:28 (IST)27 Aug 2020
    Market keenly wait for RBI Governor's speech

    "RBI governor Das is scheduled to speak today. Given the recent turmoil in the bond markets, markets would watch for comments on how the RBI would ensure that the borrowing for current fiscal goes through in a non-disruptive manner. Despite the announcement of OMO twists, the nervousness in the bond markets continues. The yields are now higher than levels before the twist was announced," said Abhishek Goenka, Founder and CEO, IFA Global.

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