Summary of this article
RBI Governor reviewed banking sector stability and operational improvements.
Banks urged to cut costs through advanced technology.
Digital fraud risks highlighted requiring stronger safeguards.
The Governor of the Reserve Bank of India (RBI), Sanjay Malhotra, met the managing directors and chief executives of public sector banks and select private sector banks in Mumbai on December 9. This was part of the central bank's regular engagement with senior management. Deputy governors, including T Rabi Sankar, Swaminathan J, Poonam Gupta, and S C Murmu, also attended the meeting along with senior officials overseeing supervision, regulation, enforcement, and financial inclusion.
Malhotra said the banking sector has been improving steadily through 2025. He suggested that banks in a changing environment should remain alert and not allow themselves to become complacent, ensuring further improvements in asset quality and operational stability.
Focus on Lower Costs and Higher Efficiency
The Governor said the 125 basis points repo rate easing during the year, along with greater use of technology, should eventually lower intermediation costs. This, he added, would support efficiency gains for sustainable growth and expand financial inclusion. He urged banks to strengthen their internal processes to keep pace with evolving risks and rising customer expectations.
He also emphasised the requirement for improved service standards. Banks were asked to reduce customer grievances, improve turnaround times, and enhance internal monitoring.
Rising Digital Risks and Growing Need for Stronger Safeguards
The Governor flagged the growing risks from digital fraud. He called on banks to adopt more robust, intelligence-driven security frameworks to protect customers. He pointed out that rapid digitisation requires constant vigilance and updated systems to manage the threat landscape effectively.
He reiterated the progress made in re-KYC processes by banks, the financial inclusion drive, and banks' efforts in tracing unclaimed deposits and helping depositors claim the same. He urged for more proactive outreach and continuous awareness campaigns to ensure that customers stay informed and connected with formal banking services.
Bank Feedback on Policy and Operations
Various policy, supervisory, and operational issues were raised and discussed during the meeting. The Governor repeated the consultative approach of the central bank and referred to the recent steps taken to simplify and consolidate regulations. He added that continued cooperation between the banking system and the central bank remains a key factor for stability and efficiency.
The meeting was closed by the assurance of continued regular engagement, with the strengthening of oversight, technology adoption, and customer trust across the sector.
