Daily Current Affairs 2021 RBI governor Shaktikanta Das is Asia Pacific central banker of the year | Daily Current Affairs 2021

RBI governor Shaktikanta Das is Asia Pacific central banker of the year

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Reserve Bank of India (RBI) governor Shaktikanta Das has been named as the ‘Central Banker of the Year 2020’, Asia-Pacific, by financial intelligence magazine The Banker.

According to The Banker, Das has brought in measures to tighten the rules around shadow banking. Faced with various challenges, the RBI governor has taken steps to bring banking in India up to the standard through a restrained approach to governance, it said.

India’s banks have faced a series of challenges, from non-performing loans to issues around fraud. Repeated economic slumps saw the central bank cut interest rates five times during 2019, and it was open to cutting them again if necessary, according to the statement released on Monday by the financial intelligence magazine.

It said that Das tried to manage banking issues within the financial system, a risky move but one that will reduce dependence on the central bank.

“Lenders outside the traditional bank network have been placed under greater levels of scrutiny. Housing finance companies have been brought under the regulation of RBI and will adhere to the same rules framework of non-bank finance companies.”

The central bank has also been proactive in providing assistance to India’s smaller banks.

“As the threat from newer micro-finance institutions looms, Das moved to help the country’s urban co-operative banks install a robust IT system that will allow them to offer banking services at a lower cost and with safeguards to protect the customer.”

The banking system itself has not gone without scrutiny, it said.

Das has been outspoken on the lack of governance in banking, calling for tighter rules for the state-owned banks, which comprise 60 percent of India’s banking sector, it added.

To make the banking system more robust, the central bank will set up a college for supervisors with the aim of improving supervisory skills.

Sessions will be available on a continuous basis, to keep them on top of the latest developments.The central bank has also mandated banks to offer benchmark-linked lending rates, with most choosing to follow the RBI’s 5.15 percent repo rate, The Banker said.

Source: CNBC

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