Sunday, March 26, 2023

SVB: The lesson of SVB is on prudence, but Indian banks are stable: RBI Governor Shaktikanta Das – Usky News

Mumbai: reserve Bank of India Governor Shaktikanta Das has said that the events surrounding Silicon Valley Bank (svb) The failure in the US highlights the need for banks to be prudent in their asset-liability management and to grow their deposits in a sustainable manner. He also said that the incident brought to the fore the dangers that cryptocurrencies pose to banks.
“Recent developments in the US banking system have brought to the fore the importance of regulation and supervision of the banking sector. These are areas that have a significant impact on maintaining the financial stability of every country,” Das said in a speech on Friday. said. Without naming SVB specifically, Das said that growth in the US is based on prudent asset liability management, sound risk management and ensuring sustainable growth in liabilities and assets, conducting periodic stress tests, and anticipating any unforeseen future Promotes the importance of building a capital buffer for stress.

Das was optimistic about the world economy. “The risk of a hard landing has been eliminated worldwide, even as the speed of deflation remains less than desirable,” he added. He was delivering the KP Hormis Memorial Lecture at the Federal Bank Headquarters in Kochi.
Das said the Indian financial system was stable as it was supported by a well-regulated banking sector along with a well-regulated banking sector. NBFC sector and other financial institutions that are under the domain of the central bank.
“We are now taking a very deep dive into the business model of banks, which banks may not like. They may feel that we are interfering in commercial operations. We are not. We make them aware that We have analysed…we find that this problem is developing in your bank. Has this problem been considered by you? If not, let the bank board decide.”
The RBI governor also said that, although there was volatility in exchange rates, India’s external debt was within manageable limits.
Das said the Group of 20 world’s largest economies (G20) should step up their coordination to help countries that face challenges related to high external debt due to the recent strengthening of the dollar. He also stressed the urgent need for the G20 to provide climate change financing to the most affected countries.


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