RBI Governor met MD & CEOs of PSU Banks, Meeting was conducted on these topics

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On July 3, 2024, the Governor of the Reserve Bank of India (RBI) held meetings with the Managing Directors and Chief Executive Officers (MD & CEOs) of Public Sector Banks and select Private Sector Banks in Mumbai.

These meetings are part of the RBI’s continuous engagement with the senior management of its regulated entities. The Deputy Governors, Shri M. Rajeshwar Rao and Shri Swaminathan J., along with the Executive Directors-in-Charge of Regulation and Supervision functions, also attended the meetings. It is worth noting that a similar meeting had taken place on February 14, 2024.

Key Points Discussed in the Meeting

During the meetings, several important issues were discussed at length. Here are the key points that were addressed:

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  1. Persisting Gap between Credit and Deposit Growth: The meeting focused on the ongoing gap between credit growth and deposit growth in the banking sector.
  2. Liquidity Risk Management and ALM-related Issues: The discussions also covered liquidity risk management and Asset Liability Management (ALM)-related issues.
  3. Trends in Unsecured Retail Lending: The meeting addressed the trends and challenges associated with unsecured retail lending.
  4. Cybersecurity, Third-Party Risks, and Digital Frauds: The Governor emphasized the need for robust cybersecurity controls, effective management of third-party risks, and measures to curb digital frauds, including efforts against ‘mule accounts’.
  5. Strengthening of Assurance Functions: The importance of strengthening assurance functions within banks was highlighted during the discussions.
  6. Credit Flows to MSMEs: The meeting also focused on credit flows to Micro, Small, and Medium Enterprises (MSMEs).
  7. Increasing Usage of Indian Rupee for Cross-Border Transactions: The discussions included strategies to increase the usage of the Indian Rupee for cross-border transactions.
  8. Banks’ Participation in Innovation Initiatives of the RBI: The meeting explored ways in which banks can actively participate in the innovation initiatives of the Reserve Bank of India.

The Governor, in his opening remarks, acknowledged the continued improvement in banks’ asset quality, loan provisioning, capital adequacy, and profitability. However, he also stressed the importance of further strengthening governance standards, risk management practices, compliance culture, and cybersecurity controls in banks.

These meetings serve as a platform for the RBI to engage with the senior management of regulated entities and discuss important matters related to the banking sector.

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2 COMMENTS

  1. Agenda of the meeting should also include Raising work pressure and incidents of suicides of bank employees. Staff shortage in PSU and Gramin Banks filling the skill gaps and Employees welfare measures among others..

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