Ethics, Trust, and Timing: The Future of Banking According to RBI Deputy Governor

The Deputy Governor of the Reserve Bank of India, Swaminathan J, has expressed concern over the increasing trend of unethical practices in banking, driven by intense competition and desire for rapid success. Speaking at Karur Vyasya Bank's event, he warned that these practices could undermine public trust in the financial sector.

The Deputy Governor highlighted that some banks and non-banking financial companies (NBFCs) have resorted to creative accounting and relaxed regulatory interpretations in pursuit of growth. He emphasized the need for managements to prioritize ethical practices and strengthen internal controls to maintain integrity and trust.

Swaminathan J also pointed out that technology adoption should be matched with investments in cybersecurity, stressing that neglect could lead to systemic vulnerabilities. Emphasizing the importance of timing, he called for banks to be proactive in responding to economic, geopolitical, and environmental factors while balancing local insights with broader diversification for sustainable growth.

(With inputs from agencies.)