Rajeshwar Rao: Building a future-ready banking system

Remarks by Mr Rajeshwar Rao, Deputy Governor of the Reserve Bank of India, at the Indian Merchant's Chamber's (IMC) 12th Annual Banking & Finance Conference, Mumbai, 16 June 2022.

Central bank speech  | 
22 June 2022

Good morning, everyone!

1. Thank you for inviting me to deliver this inaugural address this morning. This conference has been appropriately timed and quite aptly themed as we strive to come out of the debilitating impact of the pandemic. While some parts of the country are witnessing a rise in infections, the vaccines seem to have reduced its impact and infections are not as severe as they were previously. Hopefully, going forward we would be able to go on with our lives even as a new normal has dawned.

2. Building a resilient financial system is a matter of collective effort and this has been a critical learning from the pandemic and other crises. All of us are stakeholders in building a robust and resilient financial system and our collective and coherent response will make this endeavour less arduous. Against this backdrop, let me reflect on the strengths and challenges for the financial sector as we keep up our efforts to recalibrate a sustainable growth path.

3. The outbreak of COVID saw Governments across the globe impose unprecedented lockdowns because it was considered necessary to contain the spread of the virus. The consequential economic impact led to widespread downward revisions in GDP projections with some countries, including ours, experiencing GDP contraction, last heard of during the fallout of 2008 Global Financial Crisis (GFC). COVID-19 pandemic also happened to be the first real test of resilience of the global financial system since implementation of G20 reforms following the GFC. Now, as the world slowly and steadily steps into the post pandemic period, the collective focus should be on building stronger and resilient economies that will deliver inclusive growth in a sustainable manner and be adept at navigating future shocks. Evolving conditions in the Russia-Ukraine conflict, increase in the prices of crude oil, food grains and other commodities, along with rising inflation have just compounded these challenges.