Indian Banking System: Safe Amid Isolated Episodes

Reserve Bank Governor Sanjay Malhotra assures that while certain banks and a housing finance company have faced crises, these are isolated incidents and not systemic failures. The Indian banking system remains secure and resilient, backed by a robust regulatory framework to protect customer interests.

Reserve Bank Governor Sanjay Malhotra emphasized the strength of the Indian banking system amidst recent financial crises involving select banks and a housing finance company, describing these events as isolated episodes rather than systemic failures.

Addressing concerns about accounting discrepancies at IndusInd Bank and the failures of New India Cooperative Bank and Aviom India Housing Finance, Malhotra reassured the public of the system's safety. He noted that out of nearly 10,000 non-banking financial companies (NBFCs) and 1,500 cooperative banks, only a small fraction have failed over the past several years.

Deputy Governor Swaminathan Janakiraman stated that the RBI is committed to learning from these crises and protecting customers. He highlighted the bank's multi-layered regulatory framework, which includes routine inspections and compliance audits, designed to maintain system stability.

(With inputs from agencies.)