New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that India’s banking system continues to be stable and resilient despite the shock waves from the global banking crisis.
Das, who was delivering the annual KP Hormis (Federal Bank founder) commemorative lecture in Kochi, asked the banks to take precautions against any build-up of asset-liability mismatches. He said that both are detrimental to financial stability and hinted that the ongoing crisis in the US banking system seems to have emanated from such mismatches.
Das was quick to acknowledge and assure that the domestic financial sector is stable and the worst of inflation is behind us. Amid the continuing volatility in exchange rates, especially due to the excessive appreciation of the US dollar, and its impact on the external debt servicing ability of nations, he said, “We have nothing to fear as our external debt is manageable and thus appreciation of the greenback does not pose any problem to us”.
The governor focused most of the speech on India’s G20 presidency and in this context, he called for more coordinated attempts by the group of the world’s 20 largest economies to help those countries with high external debt risks due to the US dollar rise. He further said the grouping must provide climate change financing to most affected countries on a war footing.
