Indian Financial System Insulated From Developments In US, Switzerland: RBI

India’s financial system remains “completely” insulated from the recent developments in the US and Switzerland, RBI Governor Shaktikanta Das said, asserting that the country’s banking system is resilient, stable and healthy.

The governor of the Reserve Bank of India (RBI) told a press conference here on Thursday that at the global level, the recent developments in the banking system in the US and in Switzerland, have once again, brought into focus the importance of financial stability and banking sector stability.

He was here for the annual spring meeting of the International Monetary Find and the World Bank along with Union Finance Minister Nirmala Sitharaman.

Responding to a question on the collapse of the Silicon Valley Bank, he said the developments related to failures of banks in the US and also in Switzerland have naturally renewed a lot of interest.

“So far as India is concerned, the Indian banking system, the Indian financial system, remains completely insulated from the developments that have taken place in the US or in Switzerland. Our banking system is resilient, stable and healthy,” Das said.

“The parameters related to banking, whether it is capital adequacy, or it is the percentage of stressed assets or it is the liquidity coverage ratio of individual banks both at individual level as well as at the systemic level or issues like provision coverage ratio, aspects like net interest margin of banks, profitability of banks, whichever parameter you take into consideration, the Indian banking system continues to be very healthy,” he said.

Shaktikanta Das said that as far as the Reserve Bank of India is concerned, over the last few years, “we have significantly improved and tightened our regulation and supervision of the entire banking system, including the non-banking financial companies”.

The focus of supervision is on early identification of any buildup of vulnerabilities and not waiting for the crisis to build up, the RBI governor said.

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