Speeches-Reserve Bank of India

The banking business is the heart of any modern economy. It is one of the most important financial pillars in the financial sector, and it is necessary for the economy to function. The handling of a country’s trade, industrial, and farm funding needs with greater commitment and responsibility is vital for its economic success. As a result, the development of banking is intrinsically linked to a country’s progress. Banks should be considered as development leaders rather than money merchants in today’s economy.

Many sectors of the economy rely on them for deposit mobilisation and loan disbursement. The financial system reflects the state of the country’s economy. The financial system, which is dependent on a healthy and solvent banking system, determines the economy’s strength and efficiency. A sound banking system effectively mobilised capital in productive sectors, whereas a solvent banking system ensures the bank’s ability to meet its depositors’ commitments.

RBI’s Pandemic Response: Stepping out of Oblivion

(Keynote Address delivered by Michael Debabrata Patra, Deputy Governor, Reserve Bank of India – January 28, 2022 – at the C D Deshmukh Memorial Lecture organised by the Council for Social Development, Hyderabad)

Professor Muchkund Dubey, President, Professor Shanta Sinha, Chairperson, Managing Committee, Professor Sujit Kumar Mishra, Regional Director (in-Charge), Dr. Sunny Jose, RBI Chair Professor, faculty and staff of the Council for Social Development, Hyderabad (hereafter CSD), students, researchers and faculty from various universities and research institutions across the country, colleagues and friends! It is an honour to speak today as part of the famous C D Deshmukh Memorial Lecture Series, which the CSD has hosted since 1997.

This lecture series is very important to the Reserve Bank of India (RBI). From August 11, 1943, to June 30, 1949, Shri Chintaman Dwarakanath Deshmukh served as the RBI’s first Indian Governor. His relationship with the RBI began even earlier, in July 1939, when the Government of India nominated him as the RBI’s Liaison Officer. He was appointed Secretary of the Central Board of the Bank three months later, Deputy Governor two years later in December 1941, and Governor on August 11, 1943. He oversaw the RBI’s shift from a private shareholders’ bank to a government-owned institution.

A comprehensive statute for the regulation of financial companies was enacted under his watch. Another significant law enacted under his leadership resulted in the foundation of the Industrial Finance Corporation of India, the country’s first financial organisation dedicated to providing long-term credit to industry (IFCI). He also played a key part in the establishment of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) during the Bretton Woods Conference in New Hampshire, USA, in July 1944. (IBRD or the World Bank). In the halls of the RBI, his vision and ideas are still heard.

Resolution of Stressed Assets and IBC

(Address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India – April 30, 2022 – in the International Research Conference on Insolvency and Bankruptcy held at IIM Ahmedabad)

Distinguished guests, panellists, and researchers, Ladies and Gentlemen, Shri Rao Inderjit Singh, Hon’ble Minister of State for Corporate Affairs, Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs, Shri Ravi Mittal, Chairman, IBBI, Shri Sudhakar Shukla, Whole Time Member, IBBI, distinguished guests, panellists, and researchers,

Let me begin by expressing my gratitude to the conference organisers for inviting me to offer the keynote presentation. This conference, unsurprisingly, focuses on one of the most critical aspects of a healthy financial system: asset resolution. It would be an understatement to say that during the last few years, India has seen a paradigm shift in the regulatory architecture surrounding the resolution of stressed assets.

In India, the Insolvency and Bankruptcy Code has had a significant impact on the debtor-creditor relationship. It’s been a little over five years since the Code’s provisions on corporate insolvency resolution process (CIRP) were notified and implemented, and it’s time to take stock of where we’ve been so far and what we can expect in the future.

Inauguration of the Reserve Bank Innovation Hub (RBIH)

(Inaugural Address delivered by Shri Shaktikanta Das, Governor, Reserve Bank of India at the Reserve Bank Innovation Hub – March 24, 2022, Bengaluru)

1. Central banks are commonly thought of as traditional institutions that create monetary policy, issue currencies, and regulate and supervise various financial sectors and entities. This feature of a central bank is critical for any economy to grow gradually and efficiently. The RBI, as a full-service central bank, also serves as a developmental institution and is seen as a residual regulator.
2. RBI has been able to carry out its many responsibilities with the professionalism and pragmatism that is required. The capacity to blend traditional functions with innovation has been vital to the financial sector’s orderly growth. Apart from its own initiatives, the RBI has been an institution builder, nurturing the establishment and development of several institutions such as NABARD, CCIL, NPCI, IDRBT, IGIDR, and ReBIT to attain certain end goals.
3. The recent phenomena of technology advances affecting the experience of obtaining financial services, whether banking, non-banking, payment services, or participation in financial markets, has increased expectations of the RBI to function as an innovation enabler as well. The Reserve Bank Innovation Hub (RBIH) was established as a wholly owned subsidiary of the RBI to encourage and enable an environment that accelerates innovation across the financial sector. It was selected to locate the Hub in Bengaluru, Karnataka, due to the availability of skilled employees, the innovation ecosystem, and connections with academics and incubation centres, among other factors.
4. With this initiative, RBI joins a narrow club of global central banks that are bold enough to change the way they do business when it comes to innovation. It also reflects a genuine commitment to maintain ongoing engagement with industry, innovators, academia, and other relevant stakeholders in order to nurture and leverage beneficial innovation in the financial sector, which can deliver specialised products that are especially relevant to those at the bottom of the pyramid. I have no doubt that this game-changing decision will encourage more innovation not only in the RBI’s sphere of influence, but across the whole financial industry in the country.

Conclusion

The current reform process should be considered as a chance to turn Indian banking into a sound, strong, and dynamic system capable of performing its functions efficiently and effectively without the need for government intervention. Following the liberalisation of the Indian economy, the government launched a series of reform steps to make the banking sector economically sustainable and competitively strong, based on the recommendations of the Narasimham Committee.

The current global crisis, which has affected every country, has brought up a number of issues about the efficiency and soundness of the financial sector in the minds of policymakers. Now that the crisis is nearly over, the Indian government and the Reserve Bank of India (RBI) are attempting to draw some conclusions. To ensure price stability in the economy, the RBI is making appropriate policy reforms. The fundamental goal of these modifications is to improve the overall efficiency of the banking sector as well as the efficiency of individual institutions. As a result, it is vital to assess the efficiency of Indian banks in order to take remedial action to improve the banking system’s health.