Without referring to the Sri Lankan debt crisis, Shaktikanta Das said India’s unhedged ECBs account for only a small portion of the total debt.
MUMBAI, July 22 (The CONNECT) – Stressing that India is adequately insulated against foreign exchange risk, RBI Governor Shaktikanta Das flagged the need to recognise climate-related risks and incorporate them into business models.
Inaugurating Bank of Baroda’s Annual Banking Conference with the theme Banking Beyond Tomorrow, Das did not refer to the Sri Lankan debt crisis, but said India’s unhedged External Commercial Borrowings account for only a small portion of the total debt. Hence India is adequately insulated against foreign exchange risk, he quipped.
RBI is well positioned to weather any external shocks, he pointed out and explained that that spillovers from global policy tightening, ongoing geopolitical tensions, Covid-19 induced slowdown and commodity price shock have impacted growth across economies.
RBI will take adequate steps to ensure a ‘soft landing’ for the Indian economy. Notably, he defended the flexible inflation targeting approach of the MPC, highlighting that it ensures the stability of the overall ecosystem.
On the regulatory front, the Governor pointed out that good governance and a sound risk management framework is essential for an efficient and well-functioning banking system. He emphasised the role of social media in increasing customer penetration and the way it can be used a tool for grievance redressal. He also flagged the need to recognise climate-related risks and incorporate them into business models.
Das’ caution assumes significance in view of the rising dangers to coastal areas from the seas and the greenhouse effect.
With over 20 eminent speakers from within the banking and financial services industry and outside, the full-day conference featured five panel discussions covering Banking Beyond Tomorrow; New Frontiers in Financial Inclusion; Innovative Technologies and New Business Models for Digital Banking; ESG Finance and Tackling Climate Change, and ending with an Economists’ Roundtable.
Sanjiv Chadha MD & CEO, Bank of Baroda said, “As we step into the post-Covid-19 era, we have the opportunity to debate on longer-term trends and steer the discussion towards identifying the contours of Banking Beyond Tomorrow. The other aspect that we have learnt over the last few years is that banks cannot do everything themselves. They need to work with partners - partners who are increasingly embedded in core banking areas. The conference is therefore all about an outside-in perspective, and how we can define and shape the future of banks.”