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Informist, Wednesday, Aug. 5, 2026

 

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--RBI Malhotra: Don't think banks are window-dressing balancesheets
--RBI Malhotra: Window-dressing deposits does not get banks any benefits
--RBI Malhotra: Don't think banks' window-dressing deposits is substantial
--RBI Malhotra: Not concerned about banks window-dressing deposits
--RBI Malhotra: We will look into specific cases of repeated window-dressing

 

MUMBAI – Reserve Bank of India Governor Sanjay Malhotra Wednesday dismissed concerns over banks resorting to window-dressing of deposits to inflate their balance sheets at quarter-end, saying the practice does not provide any material benefit, is not substantial, and is therefore not a cause for concern for the central bank. He, however, said the RBI would examine specific cases if repeated instances of such practices are detected. 

 

Responding to a question during the post-monetary policy press conference on whether banks temporarily mobilise deposits to embellish their financial statements, Malhotra said such "window-dressing" does not materially alter a bank's balance sheet and therefore there is little incentive for this practice. "There is no benefit from such window-dressing," the governor said, adding that economists understand very well that temporary deposits around reporting dates neither provide any meaningful advantage nor have any material impact on a bank's balance sheet. 

 

The governor said he does not believe the practice is widespread or substantial enough to warrant concern, adding that the RBI's supervisory teams regularly scrutinise banks' operations and financial statements. "I do not think this window-dressing is happening on a very large scale or materially affecting balance sheets," he said. "We are not concerned about it." 

 

Malhotra said that while the central bank does not see evidence of widespread window-dressing of deposits, it would investigate specific cases if such practices are found to be recurring. "If there is a repeated pattern, we will certainly look into those specific cases," Malhotra said. 

 

The RBI's Monetary Policy Committee Wednesday left the policy repo rate unchanged at 5.25%. The committee also decided to retain the neutral stance to respond appropriately to macroeconomic developments.  End

 

Reported by Kabir Sharma

Edited by Rajeev Pai

 

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