RBI Deputy Governor M Rajeshwar Rao's advice, financial institutions need to take a giant leap

Mumbai: Reserve Bank of India Deputy Governor M Rajeswara Rao has said India needs to take a quantum leap in the scale and size of financial institutions to meet its aspiration of becoming a developed country by 2047.

“If we look back, we find that Regulatory developments and policy measures initiated in the past have led to the development of a strong financial system in India, which has weathered several crises.

He said that to achieve the goals we have for our country, we need to take a quantum leap in the scale and size of financial institutions. This may also increase risks to the units and their users.

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“In view of this, strong governance arrangements and effective risk management are going to be the twin pillars that will keep our financial institutions running and help them continue to grow,” the Deputy Governor said.

Reserve Bank of India Deputy Governor M Rajeshwar Rao said-
“Broadly, our national aspiration to become a developed economy by 2047 still requires a strong foundation of financial institutions in a complex and rapidly evolving financial landscape.”

Rao said that apart from banks, existing units will need easy access to strong capital markets to finance their growing asset needs. At the same time, they will need access to strong financial markets that will enable them to hedge off-the-book risks. Additionally, he said, there will be emergence of new entities, products and services (private credit) to meet the growing credit needs.

Reserve Bank of India Deputy Governor M Rajeshwar Rao-
“Therefore, an appropriate regulatory regime needs to be put in place to address these challenges and maintain financial stability without hindering the innovation process.”

Deputy Governor M Rajeshwar Rao said that there are very few central banks in the world which have such comprehensive responsibilities as RBI.

Deputy Governor said-
''RBI is a full-service central bank. Its scope extends to areas such as monetary policy, currency management, regulation and supervision, payment systems, financial inclusion and management of foreign exchange reserves.

Rao said that despite this increased responsibility, RBI's nine glorious decades of existence and 75 years of experience as a regulator and supervisor have created the foundation of a strong financial sector that will help the country meet its development aspirations. Can do.

–with agency input