Now the whole world is eyeing the economic reforms of RBI

rbi: Many countries of the world are facing economic problems. Whereas, India’s economy is growing rapidly. In such a situation, the whole world is praising the economic reforms taking place in our country. The Reserve Bank of India (RBI) is also being praised a lot for these reforms. Global rating agency S&P Global has now praised RBI. He said that RBI is showing serious commitment to improve governance and transparency in the financial sector and its measures are making banks more strong and transparent. The recent measures of the Reserve Bank will reduce over-zealousness of financial institutions, enhance the culture of compliance and protect the interests of customers. However, this will also increase the cost of capital for institutions.

Two NBFCs stopped from gold loan

IIFL Finance Ltd. under RBI measures. And JM Financial Products Ltd. This includes prohibiting banks from giving gold loans and loans against shares respectively. Apart from this, RBI has approved Paytm Payments Bank Ltd. (PPBL) has also been prohibited from adding new customers. According to S&P, the RBI had stopped HDFC Bank from taking new credit card customers in December 2020 after repeated technical glitches. The rating agency said that these measures are different from nominal financial penalties imposed for violations of rules. S&P Global Credit Analyst Geeta Chugh said that RBI has shown its commitment to strengthening the financial sector. However, there are risks associated with these regulatory measures. This could hamper growth and increase the cost of capital for financial institutions.

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RBI is making a transparent system

According to S&P, RBI is more strict on non-compliance, customer complaints, data privacy, governance, know your customer (KYC) and anti-money laundering issues. Geeta Chugh said that governance and transparency have been the major weaknesses of the financial sector in the country. The new measures of RBI are creating a more robust and transparent financial system. RBI has decided to publicly disclose key issues that lead to suspension or other strict action against the concerned entities. The central bank has also become more vocal in condemning activities that it considers harmful to the interests of customers and investors.
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