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Informist, Friday, Jul. 17, 2026

MUMBAI – Reserve bank of India Governor Sanjay Malhotra Friday said there was nothing to worry about any segment of bank lending. Rate of growth in bank credit is quite satisfactory, Malhotra told Doordarshan in an interview. Banks' loans grew 18.6% on year to INR 219.28 trillion as of Jun. 30.

The governor said he does not see higher credit growth as a concern for the economy. "About two years ago, in microfinance, there was an increase in interest, which was difficult for many people to repay," Malhotra said. "There was pressure on that sector. But today, although there is an increase in interest in many sectors, like in gold loans, there is a lot of interest there. But we don't think so. MSMEs (micro small medium enterprises segment) have a good growth rate of 24-25%. There is an annual growth rate. But we keep an eye on all sectors, all banks, and all regulated entities. We keep an eye on them. We don't see any such issue in any sector or sector."

Talking about the domestic currency, he said the rupee is stable and supported by the recent policy measures taken by RBI and government. Inherent strength of India's external sector is also supporting the domestic currency, the governor said. Malhotra said rupee was in relatively good position.  

Commenting on the tensions in West Asia, Malhotra said uncertainty brought in by the war is a risk for the Indian economy and the central bank will continue to wait and watch the situation. The governor said inflation was in a relatively good position even though the CPI inflation for June was 4.38%, above the central bank's target of 4%. He explained that inflation for June was above the target due to supply-side pressure.  

"As you know, the CPI inflation is increasing. We also have a 5.1% target (for CPI) for this (financial) year," Malhotra said. "So our target is a little higher. But it is mainly due to supply-side reasons. If inflation is higher than the target due to supply-side problems, we pay attention to the composition of it. And on that basis, we make decisions." The governor reiterated that the RBI's target is headline CPI, and it is also tracking core CPI.  

The current biggest challenge confronting India at the moment is the uncertainty in its external sector, Malhotra said. He is also hopeful that in the near and medium term, the country's balance of payments will remain strong. "We hope that in the near term, in the medium term, in the long term, our balance of payments, our heavy expenses should not go down. There is no need to worry," Malhotra said. India's fiscal and monetary policy are co-ordinated, he said. 

The Reserve Bank is also pushing the usage of artificial intelligence and technology in the banking system as it plays an important role. "If we want to increase customer service, AI and technology can play a major role in this. To increase customer service, and to provide it more easily, to reduce costs, to improve decisions, to make the internal processes more efficient, to reduce costs, to improve decisions, there are risks in all of this," Malhotra said.  End

Compiled by J. Navya Sruthi, Janwee Prajapati, and Aaryan Khanna

Filed by Akul Nishant Akhoury

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