Indian financial sector remains stable despite crisis in US banking system, says RBI Governor

@RBI

Amid the ongoing crises in the US banking system after the fall of Silicon Valley Bank, RBI Governor Shaktikanta Das has assured that India’s financial sector remains stable. Delivering the annual KP Hormis lecture at Kochi this evening, Mr. Das said the crisis however, reinforces the importance of robust regulations and supervision. Mr. Das said it is important for banks to ensure prudent asset liability management, robust risk management and sustainable growth in liabilities and assets. He added that the ongoing crisis also clearly shows the risks of private cryptocurrencies to the financial system.

Assuring that RBI has taken all necessary steps for risk management and stress tests, the governor asked banks to avoid any excessive build-up of asset-liability mismatch as they are detrimental to financial stability. He said that the worst of inflation is behind us and that the Indian rupee has exhibited least volatility among its peers. Meanwhile, talking about volatility in exchange rates, Mr. Das said India’s external debt is manageable and thus appreciation of the dollar does not pose any problem.

Talking about India's G20 presidency, the RBI Governor called for more coordinated attempts by the group of the world's 20 largest economies to help those countries with high external debt risks due to the US dollar rise. He also said the grouping must provide climate change financing to most affected countries on a war footing.