New Delhi. RBI Governor, Shaktikanta Das has said that even though shareholders’ interest is important in the business of banking, it is the interest of depositors that is even more important. Addressing the Bank of Baroda Banking Conference in Mumbai yesterday, Das said, banks are not just the custodians of shareholders’ interest but more fundamentally the trust of the depositors, who are at the very core of the banking system.
Emphasizing that the banking sector is going through a period of churning and competition from fintech firms, Mr. Das said banks must prepare themselves for facing the dynamic environment while keeping their focus on appropriate business models, sustainability, stability, and consumer centrality.
Stating that banks are expected to be permanent institutions after they obtain the regulator license, Mr. Das said banks should always remember that the funds they deploy belong to depositors and this should reflect in robust risk management, governance, and internal control systems. He said shareholders of banks must focus on long-term profitability and market valuation. The Governor said such an approach will usher in a new paradigm of banking and will stand in good stead for our economy.
Talking about the conference’s theme ‘Banking Beyond Tomorrow’, the RBI Governor said it would include adoption of emerging technologies, customization of products and services, and enhanced business and process automation. Mr. Das said UPI marked a watershed moment in the commencement of Open Banking in India. He said the country is witnessing an emergence of new business models because of the success of UPI, implementation of account aggregator framework, and the mass adoption of digital banking services.
