-“RBI has been supplying US dollars to the market to ensure adequate supply of liquidity,” Governor Shaktikanta Das said.
-Central bank last month banned the loading of prepaid payment instruments from credit lines
New Delhi / Mumbai, NFAPost: The Indian economy is “relatively better placed amid grim global scenario,” RBI Governor Shaktikanta Das on Friday said, adding that the “Indian rupee is holding up well relative to advanced and emerging market peers..”
“We have zero tolerance for volatile and bumpy movement of rupee,” Shaktikanta Das said, adding, “RBI actions have helped in smooth movement of rupee.”
The rupee fell seven paise to 79.92 against the US dollar in opening trade on Friday. “RBI has been supplying US dollars to the market to ensure adequate supply of liquidity,” the governor said.
Speaking at the inauguration of the Bank of Baroda Annual Banking Conclave 2022, “The future of banking would witness a major shift in customer’s choices and preferences with enhanced expectations from the banking industry,” said Shaktikanta Das.
Shaktikanta Das said, “The banking sector is going through a churning, the future of banking would witness a major shift in customer’s choices and preferences with enhanced expectations from the banking industry.”
“Each of the developments would present unique oppurtunities, and challenges to the existing and newer players.”
The RBI Governor added, “It has to be borne in mind that sometimes that the disruptions can be sudden that it is impossible to anticipate them.”
Talking about the future of the banking industry, Shaktikanta Das said, “Banking beyond tomorrow would revolve around, a) the adoption of emerging technologies, customisation of products and services, enhanced business and process automation, b) development of suitable business models with strong governance frameworks, better information management, changes in the mode of working, building of enhanced resilience capabilities and more responsible societal, enivornmental role for the banks.”
The RBI Governer said, “The current inflation targeting framework has worked very well since its adoption in 2016.” RBI’s decision on the rate hike, and liquidity always takes into consideration the growth objective, Shaktikanta Das said.
‘Digital lending firms should operate under licence granted’
Digital lending firms should first seek the central bank’s permission before getting into businesses they are not licensed for, said Shaktikanta Das, governor of Reserve Bank of India (RBI), on Friday.
A RBI notification last month banned the loading of prepaid payment instruments (PPIs) from credit lines, shocking buy-now-pay-later (BNPL) companies and the wider fintech industry.
“The firms should operate under the licenses granted to them. If they are doing anything beyond that then they should seek our permission. Without permission, if they are engaging in activities for which they have no license then it is not acceptable. There will be risk build-up and we cannot allow that,” he said at an event organised by the Bank of Baroda in Mumbai.
“We want to support innovation and at the same time we want the entire ecosystem to grow in an orderly and regulated manner so that there is no compromise on financial stability,” Shaktikanta Das said, adding the central bank’s digital lending norms will be made public in a few weeks.
Industry experts have said RBI’s ban would affect at least about 8 million BNPL customers after firms either stopped their offerings or slowed down fetching new clients. Fintech firms had launched products around credit that were driven by non-banking financial companies (NBFCs) and delivered through PPIs.
Some new-age digital lending firms have been accused of unscrupulous practices that included charging customers exorbitant interest rates and harassing them. Such firms mushroomed during the pandemic when the need for instant loans peaked because of economic distress.
The RBI had formed a working group that made a number of recommendations on how such firms should be regulated.
