The Reserve Bank of India’s (RBI) deputy governors, M Rajeshwar Rao and M K Jain on Friday met with managing directors (MDs) and chief executive officers (CEOs) of small finance banks to discuss governance and regulatory issues.
The Deputy Governors, Reserve Bank of India M K Jain and M Rajeshwar Rao, held discussions with Managing Directors (MDs) and Chief Executive Officers (CEOs) of small finance banks (SFBs) on June 10, 2022. Executive Directors of Supervision and Regulation and other senior officials of the Reserve Bank also attended the meeting, the Reserve Bank of India said in a statement.
The RBI said, “in the meeting held today, the emphasis on according due importance to these themes for sustainable growth of SFBs, particularly their business model and governance, was reiterated after taking stock of the developments in the sector.”
Small finance banks were advised to continue to evolve in tune with the differentiated banking license given to them with proportionate growth in their capital base.
Among other matters, asset quality concerns including viable portfolio mix and further strengthening of customer service and grievance redressal framework with commensurate IT resilience were also discussed. The Reserve Bank took note of the suggestions and inputs from the participants.
RBI on Friday advised small finance banks (SFBs) to continue to evolve in tune with the differentiated banking licence given. In the meeting held with the heads of SFBs, RBI emphasised on the sustainable growth of these banks, particularly their business model and governance.
Meanwhile, earlier in the meeting with heads of SFBs held on August 27, 2021, the evolution of their business model and the need for enhancing Board oversight and professionalism, improving assurance functions and augmenting IT infrastructure, taking into account the stress build-up due to Covid-19 along with requisite mitigation measures, were discussed.
Meanwhile right after the Reserve Bank of India (RBI) raised India’s repo rate by 40 basis points, the banking sector mimicked the same by increasing interest rates in lending and deposit schemes. From major banks like ICICI Bank, PNB, and Bank of Baroda to even small finance banks, have joined the bandwagon of raising lending and deposits rate.
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