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Informist, Tuesday, Sept. 30, 2025

 

MUMBAI - Banks should hold forward looking capital buffers that reflect their risk profile and growth ambitions rather than simply complying with regulatory floors, Reserve Bank of India Deputy Governor Swaminathan J said. "Asset quality must also be managed with a preventive mindset, using early warning systems and predictive analytics to identify stress before it becomes a crisis," he said in a speech on Sept. 12 at the PSB Manthan 2025. The speech was published on the RBI website on Tuesday.  

 

Swaminathan also called for banks to strengthen their technology infrastructure, cyber safeguards, vendor oversight, and business continuity planning, so that services remain secure and uninterrupted under every circumstance. He called strong governance, financial resilience, innovation and adaptability, people and culture, and an all-inclusive customer centricity as the five pillars on which public-sector banks can build their future.

 

He also called for collaboration between public-sector banks and fintechs, including the Unified Lending Interface. "In today's financial landscape, technology is no longer optional. Modernising core IT (information technology) systems and adopting advanced analytics are essential to remain competitive. AI/ML (Artificial Intelligence/Machine Learning) can strengthen fraud detection, improve credit assessment, and personalise customer engagement," he said.

 

He added that public-sector banks should consider shared technology platforms and joint development of digital infrastructure to leverage economies of scale, reduce costs, and ensure consistency in customer experience. He said that banks can experiment with a "digital twin", a virtual model that mirrors a real process such as the working of a branch or the journey of a customer applying for a loan. "By testing changes on the digital twin first, banks can identify bottlenecks and improve efficiency before making changes in the real world," he said. 

 

Swaminathan said that the Indian economy shows resilience and stability even amidst multiple headwinds, such as geopolitical tensions, shifting trade alignments, climate transitions, and rapid technological disruptions. End

 

Reported by Pratiksha

Edited by Deepshikha Bhardwaj

 

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