Banks Should Have Adequate Capital Buffers, Liquidity: RBI Chief
NDTV
The RBI is also doing a fresh assessment of the quality and coverage of statutory branch audits of private banks, the governor said, stressing the need for governance and adequate audits across regulatory entities.
Banks should have adequate capital buffers and liquidity and be ready to report earnings even under macroeconomic stress, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday.
"Our approach has been to enhance the resilience as well as the robustness of the financial sector so that individual entities effectively withstand stressful situations and continue to contribute to the economic development of the country," Mr Das said at an event in Mumbai.
As the banking regulator, the RBI has gone beyond in this regard, nudging entities to build adequate capital buffers in times of plenty, Mr Das said.
The central bank is now looking at the business models of banks more closely, Mr Das said. He said business models can sometimes create risks in certain parts of their balance sheets which can eventually blow out into a bigger crisis.
