Take steps to minimize impact of geopolitical developments on balance sheets, RBI’s Das urges banks

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Governor says banks must consider mitigation measures, including raising capital

Governor says banks must consider mitigation measures, including raising capital

Reserve Bank Governor Shaktikanta Das urged banks to remain alert to ongoing geopolitical developments and proactively take mitigating measures, including raising capital, to minimize the potential impact on their balance sheets.

The governor, along with other RBI officials, held meetings with managing directors and CEOs of selected public and sector banks on Tuesday and Wednesday, the Reserve Bank of India (RBI) said in a statement.

In his introductory remarks, Das noted the “key role” played by banks in supporting the economy throughout the pandemic.

Furthermore, he said the banking sector remained resilient and continued to improve despite various headwinds.

“He advised banks to remain alert to recent geopolitical developments and proactively take mitigating measures, including raising capital to ensure the potential impact on their balance sheets is minimized,” the statement said. RBI.

Mr. Das also asked banks to pay particular attention to improving their complaint redress systems and to continue to provide the necessary support for the ongoing recovery of economic activity.

Issues relating to credit drawdown, asset quality outlook, collection efficiency, consumer complaint resolution, establishment of digital banking units, IT infrastructure resilience and cybersecurity defenses in banks were addressed.

The meetings were also attended by Deputy Governors MK Jain and Mr. Rajeshwar Rao.

The ongoing war between Russia and Ukraine has impacted global supply chains, leading to a spike in global commodity prices. Central banks, including the RBI, have taken several measures aimed at containing rising inflation.

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