KOCHI (KERALA): Reserve Bank of India (RBI) governor Shaktikanta Das declared that India is the “highest ranked country G20 country according to Climate Change Performance Index 2023″ and is also the “5th best performing country in the world”.
During the 17th KP Apart Memorial Lecture on Friday, Das said, “As India is expected to remain one of the fastest growing economies in the world, our energy demand could increase in several ways. The challenge for us is twofold: one, to meet the expected increase in energy demand; and second, to move quickly from fossil fuels to renewables. »
“Climate protection of our infrastructure has also been a priority, even more so in view of the significant investments in infrastructure in recent years,” the governor said. “Through global forums such as the Coalition for Disaster Resilient Infrastructure (CDRI)4, India is providing leadership in global efforts to address these challenges,” the RBI Governor said.
The Governor said the global crisis was both an opportunity and a major test for the G20 which represents 85% of world GDP and 75% of world trade. “Following the 1997 East Asian financial crisis, the G20 was founded in 1999 as a forum for finance ministers and central bank governors to discuss global issues and policy options,” he added.
“After the global financial crisis of 2008, the G20 was elevated to Heads of State/Government level in 2009,” the RBI Governor said, adding that “in an interconnected world, national policies alone cannot not be fully effective when the nature of the shocks is global and persistent.
The Governor said: “Among the multiple risks facing the global community, the surge in inflation has posed a complex monetary policy dilemma in every economy between raising interest rates enough to bring inflation under control and, at the same time, minimizing the sacrifice of growth to avoid a hard landing.”
He said the aggressive tightening of monetary policy by systemic central banks since the start of 2022 and the resulting appreciation of the US dollar has led several economies, with a high share of external debt, to become very vulnerable to over-indebtedness. .
Regarding recent developments in the US banking system, he said that this had highlighted the importance of regulation and supervision of the banking sector. “These are areas that have a significant impact on the preservation of the financial stability of each country.”
He said these developments in the United States underscore the importance of ensuring prudent asset and liability management, strong risk management and sustainable growth of liabilities and assets; perform periodic stress tests; and building up capital reserves for any future unforeseen crises. “They also highlight that cryptocurrencies/assets or otherwise can pose a real danger to banks, either directly or indirectly,” he added.
The governor said that RBI has taken the necessary steps in all these areas and that regulation and supervision of the financial sector and regulated entities have been suitably strengthened.
Shaktikanta Das said that the regulatory measures include, among others, the implementation of the leverage ratio (June 2019), the large exposures framework (June 2019), the guidelines on governance in commercial banks (April 2021) , Standard Asset Securitization Guidelines (September 2021), Ladder Based Regulatory Framework (SBR) for NBFCs (October 2021), Revised Microfinance Regulatory Framework (April 2022), Revised Regulatory Framework (July 2022 ) for Urban Cooperative Banks (UCB) and Digital Lending Guidelines (September 2022).
According to the governor, the RBI’s supervisory systems have been significantly strengthened in recent years through measures that include a unified and harmonized supervisory approach for commercial banks, non-bank financial companies and city cooperative banks.
During the 17th KP Apart Memorial Lecture on Friday, Das said, “As India is expected to remain one of the fastest growing economies in the world, our energy demand could increase in several ways. The challenge for us is twofold: one, to meet the expected increase in energy demand; and second, to move quickly from fossil fuels to renewables. »
“Climate protection of our infrastructure has also been a priority, even more so in view of the significant investments in infrastructure in recent years,” the governor said. “Through global forums such as the Coalition for Disaster Resilient Infrastructure (CDRI)4, India is providing leadership in global efforts to address these challenges,” the RBI Governor said.
The Governor said the global crisis was both an opportunity and a major test for the G20 which represents 85% of world GDP and 75% of world trade. “Following the 1997 East Asian financial crisis, the G20 was founded in 1999 as a forum for finance ministers and central bank governors to discuss global issues and policy options,” he added.
“After the global financial crisis of 2008, the G20 was elevated to Heads of State/Government level in 2009,” the RBI Governor said, adding that “in an interconnected world, national policies alone cannot not be fully effective when the nature of the shocks is global and persistent.
The Governor said: “Among the multiple risks facing the global community, the surge in inflation has posed a complex monetary policy dilemma in every economy between raising interest rates enough to bring inflation under control and, at the same time, minimizing the sacrifice of growth to avoid a hard landing.”
He said the aggressive tightening of monetary policy by systemic central banks since the start of 2022 and the resulting appreciation of the US dollar has led several economies, with a high share of external debt, to become very vulnerable to over-indebtedness. .
Regarding recent developments in the US banking system, he said that this had highlighted the importance of regulation and supervision of the banking sector. “These are areas that have a significant impact on the preservation of the financial stability of each country.”
He said these developments in the United States underscore the importance of ensuring prudent asset and liability management, strong risk management and sustainable growth of liabilities and assets; perform periodic stress tests; and building up capital reserves for any future unforeseen crises. “They also highlight that cryptocurrencies/assets or otherwise can pose a real danger to banks, either directly or indirectly,” he added.
The governor said that RBI has taken the necessary steps in all these areas and that regulation and supervision of the financial sector and regulated entities have been suitably strengthened.
Shaktikanta Das said that the regulatory measures include, among others, the implementation of the leverage ratio (June 2019), the large exposures framework (June 2019), the guidelines on governance in commercial banks (April 2021) , Standard Asset Securitization Guidelines (September 2021), Ladder Based Regulatory Framework (SBR) for NBFCs (October 2021), Revised Microfinance Regulatory Framework (April 2022), Revised Regulatory Framework (July 2022 ) for Urban Cooperative Banks (UCB) and Digital Lending Guidelines (September 2022).
According to the governor, the RBI’s supervisory systems have been significantly strengthened in recent years through measures that include a unified and harmonized supervisory approach for commercial banks, non-bank financial companies and city cooperative banks.
