Sanjay Malhotra, Governor of the Reserve Bank of India, reassured the public that India’s banking system continues to be “safe and secure.” He emphasized that the recent accounting lapses at IndusInd Bank and restrictions placed on New India Cooperative Bank should be viewed as isolated “episodes” rather than systemic failures.
During the post-MPC meeting media briefing, Malhotra addressed concerns about the incidents, pointing out that with thousands of non-banking financial companies (NBFCs) and cooperative banks operating in India, occasional challenges are to be expected. He emphasized that these incidents should not be viewed as failures, as they are part of the normal operation of the banking sector. Malhotra stressed that despite these challenges, the Indian banking system remains “safe, secure, and robust” overall.
“These are not even failures, they’re episodes. These things will happen… The Indian banking system remains safe, secure, and robust at a systemic level,” Malhotra said.
IndusInd Bank disclosed an accounting discrepancy of Rs 1,577 crore in its derivatives portfolio in March. Despite increasing scrutiny of the bank, the RBI has emphasized that isolated incidents like these should not detract from the overall resilience of the banking system in India.
