RBI Banking Rules: RBI’s strict warning! If trust is to be maintained, there needs to be discipline in administration

• RBI Governor’s Appeal to UCB
• Banks should not compromise on asset quality
• Directed to focus on maintaining customer confidence

RBI Banking Rules: The Reserve Bank of India has made it clear to urban cooperative banks (UCBs) that the cooperative banking sector must adhere to high standards of governance to maintain its credibility. Central Bank Governor Sanjay Malhotra urged such banks to closely monitor asset quality and adopt robust underwriting practices. The directive was issued at a high-level meeting in Mumbai, where the governor addressed select UCB presidents, managing directors and CEOs.

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RBI Governor Sanjay Malhotra explained that UCBs are not limited to just disbursing loans, but are also responsible for ensuring the quality of those loans. He stressed the need for diligent monitoring of asset quality. The governor’s statement is significant amid rising risks in the banking sector. He said adoption of robust underwriting practices is the need of the hour to avoid problems like bad loans or NPAs. Also, as business is entirely based on trust, Governor Malhotra advised bankers to adopt a customer-centric approach. He emphasized on maintaining ethical practices and timely redressal of complaints to maintain customer confidence in the sector.

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RBI’s only intention in this is that digital fraud has increased significantly in the current times; And there is a need to improve the way of working to curb this fraud. Also, RBI Governor Sanjay Malhotra has urged banks to focus on strengthening the credit system in short. Similarly, it has been directed to focus on how to improve security and speed in customer transactions.

It is important for regulatory bodies to understand the needs of their customers and protect them. Also, Sanjay Malhotra has said that it is important to improve the technology of banks to deal with digital fraud.