Slowing credit growth critical challenge for banking industry: RBI Governor
NEW DELHI [Maha Media]: Reserve Bank of India Governor Shaktikanta Das has said that slowing credit growth is one of the most critical challenges for the banking industry. He said credit growth has moderated to 7-7.5 per cent this year and there is a need to focus on prudent lending by the banks.
Addressing the Mint annual banking conclave in Mumbai yesterday the apex Bank Governor stated that to facilitate the flow of credit, the RBI has taken several steps like reducing repo rate, facilitating bank refinance to NBFCs for onlending to priority sector and providing long-term repo operation (LTRO), among others.
He said the strength of a banking system depends on the strength of its corporate governance that fosters a robust and ethics-driven compliance culture.
He added that the RBI can only lay down certain rules, guidelines or sign post but as the custodian of the depositors' money and having an accountability to both the depositor and shareholders, banks will have to necessarily focus on improving their governance and compliance culture.
Das said besides structural changes, digital disruptions will continue to transform the banking sector.
The governor said that the RBI's endeavour has constantly been to improve the efficacy of its supervisory and regulatory functions, so that the resilience of the regulated financial entities can be enhanced.