RBI governors discuss regulatory issues with smaller financial banks. See the details

Reserve Bank of India (RBI) Deputy Governors M Rajeshwar Rao and MK Jain met on Friday with Managing Directors (MDs) and Chief Executive Officers (CEOs) of smaller financial banks to discuss governance and regulatory issues .

Deputy Governors, Reserve Bank of India MK Jain and M Rajeshwar Rao held discussions with Managing Directors (MDs) and Managing Directors (CEOs) of Small Financial Banks (SFBs) on June 10, 2022. The Executive Directors of supervision and regulation and other senior Reserve Bank officials also attended the meeting, the Reserve Bank of India said in a statement.

The RBI said that “At the meeting held today, the emphasis on the importance given to these themes for the sustainable growth of SFBs, in particular their business model and governance, was was reiterated after taking stock of developments in the sector”.

Smaller financial banks have been advised to continue to evolve in line with the differentiated banking license granted to them with commensurate growth in their capital base.

Among other issues, asset quality issues, including viable portfolio composition and further strengthening of customer service and grievance framework with commensurate IT resilience, were also discussed. The Reserve Bank took note of the participants’ suggestions and contributions.

On Friday, RBI advised Small Financial Banks (SFBs) to continue to evolve in line with the differentiated banking license granted. During the meeting held with the heads of the SFBs, RBI emphasized the sustainable growth of these banks, in particular their business model and governance.

Meanwhile, earlier in the meeting with SFB leaders held on August 27, 2021, the evolution of their business model and the need to strengthen board oversight and professionalism, improve insurance functions and augmenting the IT infrastructure, taking into account the accumulation of stress due to Covid-19 as well as the required mitigation measures, were discussed.

Meanwhile, just after the Reserve Bank of India (RBI) hiked India’s repo rate by 40 basis points, the banking industry mimicked the same by raising interest rates in repo programs. loan and deposit. From big banks like ICICI Bank, PNB and Bank of Baroda to smaller financial banks, have joined the bandwagon to raise lending and deposit rates.

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