Looking more closely at the business model of banks, RBI Governor Das said on financial challenges

Governor Shaktikanta Das on Thursday said the Reserve Bank has started closely monitoring the business model of banks and financial institutions in the wake of the banking crisis in the United States and Europe. Das said an inappropriate model could create risks in certain parts of the balance sheet and could lead to a bigger crisis for banks in the future. Das, speaking at the Global Conference on Financial Resilience, said that the US banking sector has questioned the business model, especially of individual banks.

RBI Governor Shaktikanta Das, during his address at the Global Conference on Financial Resilience, said that the Indian banking system remains resilient and has not been adversely affected by the recent episodes of financial instability witnessed in some advanced economies. He said that financial flexibility is closely linked to the business model and strategy of the bank.

RBI has implemented various prudential regulatory framework including capital adequacy requirement, asset classification, provisioning requirements and liquidity management framework and the gross non-performing assets (NPAs) of banks have come down from 5.8 to 4.41 per cent by December 2022.