TIL Desk/Business/New Delhi/ As the economy reels under the pandemic and post lockdown woes, Reserve Bank of India (RBI) Governor Shaktikanta Das is of the view that extreme risk aversion by financial institutions will have adverse outcomes for all.
Noting that India’s financial system remains sound, Das, in his foreword to the RBI’s latest Financial Stability Report, wrote that in the current environment, the need for financial intermediaries to proactively augment capital and improve their resilience has acquired top priority.
“In the evolving milieu, while risk management has to be prudent, extreme risk aversion would have adverse outcomes for all,” he wrote. The Governor’s statement gains significance as concerns have been raised that banks are still risk averse and are largely shying away from lending in general, except for the sovereign guaranteed ECLGS loans for MSMEs.
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