Shaktikanta Das, the Reserve Bank of India (RBI) Governor, defended the recent tightening of norms on unsecured lending, deeming it a preemptive and targeted move in the interest of sustainability.
Speaking at the annual FIBAC event, he emphasized that exclusions were made for certain sections like loans for housing, vehicle purchases, and those availed by small businesses due to their positive impact on growth.
“We have also recently announced a few macroprudential measures in the overall interest of sustainability. These measures are preemptive in nature. They are calibrated and targeted,” Das stated. While he didn’t foresee new stress building up in the banking system presently, he urged lenders to persist with stress testing.
He specifically addressed non-bank finance companies-microfinance institutions (NBFC-MFIs), cautioning them about reporting higher interest margins and advising prudent use of the flexibility provided by the RBI in setting rates. Despite headline inflation showing signs of cooling, Das reiterated the RBI’s unwavering focus on addressing price rise.
Moreover, he highlighted the Indian rupee’s stability amid elevated US treasury yields but noted some depreciation in the local currency. Additionally, Das advocated for agricultural marketing reforms and connected value chains to maintain high growth, ensure durable price stability, and mitigate price shocks.
