“We have to bear in mind that risks often get overlooked or forgotten when things are going well.” “It is in times such as these that complacency may set in,” he flagged. “While these gaps have been mitigated, it is necessary that boards and the managements do not allow such gaps to creep in,” he said.However, the Indian banking sector stands out as strong and stable with a good capital-to-risk-weighed asset ratio, low gross and net bad loan ratios and a healthy provision coverage ratio, Das said. Instead, citing examples, the governor said that supervisors had spotted some instances of sale and buyback of stressed loans between two lenders, structured deals with good borrowers to conceal stress and disbursement of new loans close to the time of repayment.ĭas also said that despite the guidelines on corporate governance, it was a matter of concern that the RBI has come across gaps in governance at certain banks, which have the potential to cause some volatility in the sector. “During the course of our supervisory process, certain instances of using innovative ways to conceal the real status of stressed loans have also come to our notice,” Shaktikanta Das said during his inaugural address to directors of banks at a conference organised by the RBI. MUMBAI: The Reserve Bank of India (RBI) has come across instances of some banks trying to conceal the real status of their stressed assets while governance gaps have also been noticed at certain lenders, according to its governor.
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