Malhotra highlighted India’s robust banking fundamentals—credit expansion, deposit growth, asset quality, profitability—and RBI’s role in supporting responsible bank growth
MUMBAI
RBI Governor Sanjay Malhotra on Friday said that the Reserve Bank of India (RBI) will not interfere in decisions meant for bank boards, stressing that regulators should not replace boardroom judgment. Speaking at the State Bank of India’s Banking and Economics Conclave in Mumbai, Malhotra said Indian banks are now more mature and stable than a decade ago.
“The regulator’s role is not to micromanage but to ensure discipline and sustainability,” he said, noting that each decision should be made by banks on its own merit. He compared the regulator’s role to that of a gardener, who nurtures growth while trimming unwanted branches to shape a healthy financial ecosystem.
Malhotra pointed to India’s strong banking fundamentals, including credit expansion, deposit growth, improved asset quality, and higher profitability. “The RBI’s role is to enable banks to grow responsibly,” he added.
He also highlighted the 22 recent RBI measures, which include allowing banks to fund acquisitions, raising limits on loans against shares, and draft norms for the Expected Credit Loss (ECL) framework. These reforms, he said, will make rule-making more data-driven and transparent.
Malhotra credited regulatory and structural reforms for helping State Bank of India (SBI) recover from losses in 2018 to becoming a $100 billion company today.
He also praised the Insolvency and Bankruptcy Code (IBC) introduced in 2016, saying it has transformed India’s credit culture and strengthened debt resolution frameworks through both court and out-of-court mechanisms.