Highlights: RBI Governor Shaktikanta Das On Future Of Banking In India

"Serious fintech players understand RBI's regulatory approach very well. Our bilateral engagement with fintech players and associations have been great.Our fintech department has holding regular meetings individually and as a group. Last year we announced a fintech SRO, which will act as an interface between RBI and fintech players," says RBI Governor Shaktikanta Das. 

"We are making good progress on the fintech SRO. Any fintech player, when they come into a regulated space, there are rules and regulations they must follow. Whenever we see any areas where risk might be building up, we have taken action." 

"RBI's actions against certain entities is not a punishment, it is a corrective measure. We conduct on-site and off-site supervision of entities we regulate. Supervision has been developed and used to its best. We are maintaining an eagle's eye on the entities. When we find a deficiency, we alert the entities and ask for a clear roadmap. Our expectation is that they address the deficiency in time. Our action comes after the entities have been given time to address the issues. Supervisory restrictions prioritise depositor and consumer interest," says RBI Governor Shaktikanta Das. 

"Young Indians are aspirational and there is nothing wrong in it, it is a natural process and is actually a positive development.  Our advise to banks is that you should carefully monitor this change. Currently this is not an issue, but in the future, this can lead to a structural liquidity issue," says RBI governor Shaktikanta Das. 

"Banks have to be proactively careful about dealing with liquidity management. Credit and deposit growth must be in balance. Banks are raising funds through infrastructure bonds, at attractive rates. Such bonds do not have reserve requirements. These bonds are being used to finance infrastructure schemes, which is a positive move. Credit disbursement has become very fast owing to mobile banking, but deposit mobilisation is still a physical activity."

"How GDP growth and other economic activity will move is the other thing RBI is focusing on. Lot of important reforms have taken place in the last few years. Monetary policy framework, IBC, Make In India, etc have all happened in recent years. Pending reforms such as those in agricultural marketing and supply sectors, labour, others have to be completed," says RBI Governor Shaktikanta Das. 

"We have to ensure price stability in the economy. Price stability gives a lot of confidence to the consumer. Maintaining inflation will also bring investor confidence. The second thing we must maintain as a regulator is Financial stability, that is also very important," says RBI Governor Shaktikanta Das. 

"We cannot take fuel and food out of the equation and say that inflation is falling. It is not looking at the issue through the common person's lens. Food inflation share in overall consumption basket is 46%," says RBI Governor Shaktikanta Das. 

"Nearly 50% of a household's spending is toward food, future data will determine where rates will move. We have confidence that inflation will fall and come around 4%, but for this year, average CPI inflation rate is 4.5%, There are a lot of uncertainities to account for right now."

"We never said inflation will go below under 4%, our target is durable alignment to the target, to stay close to 4%. A one-off 4% reading cannot drive policy, we have to be patient," says RBI Governor Shaktikanta Das. 

"Covid has resulted in permanent output loss in every economic in the world, but the way we emerged out of these crisis is very exemplary in India's case," says RBI Governor Shaktikanta Das.