RBI asks banks to take steps for business continuity

2021-04-12 22:30:00

MUMBAI: In a meeting with bank CEOs on Monday, RBI governor Shaktikanta Das asked them to take measures proactively to maintain business continuity, sharpen strategies and raise adequate capital for strengthening their balance sheets.
The directive comes at a time when the nation is under the grip of a second wave of the pandemic with fears that the financial capital Mumbai might face additional restrictions on movement to curb the spread of infections.
Das met with chiefs of all public sector banks and select private sector banks on Monday through a video conference. The meetings were attended by RBI’s deputy governors M K Jain, M Rajeshwar Rao and a few other senior officials.
Das emphasised the need for banks to maintain a close vigil on payments and other IT systems operated by them and fortifying them for enhanced efficiency and resilience to offer seamless and uninterrupted customer service.
Bankers said that the central bank was concerned about the digital channels as these have emerged as the primary route for conducting bank transactions for most customers.
In his opening remarks, Das highlighted the recent policy measures taken by the RBI to further support the ongoing recovery, while preserving financial stability. He spoke of the importance of credit flows in sustaining the nascent economic recovery and advised the banks to remain watchful of the evolving situation.
Das is understood to have asked banks on the prospect for stressed assets during the current fiscal. Bankers said that while they did expect the economic revival to continue, the recovery was likely to be ‘K’ shaped in the first quarter. This was because some sectors of the economy were expected to look up but businesses that were hit hard by the lockdown last year continued to face dim prospects because of the new round of infections.
The governor also asked banks about the progress they had achieved in implementing the Covid resolution framework, which was introduced by the RBI in the previous fiscal. The governor also sought feedback from banks on the kind of liquidity requirements they are likely to face and on the credit flow to stressed sectors such as MSMEs and retail.

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