Mumbai (Maharashtra) [India], August 25 : Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday underscored that financial stability and price stability are vital for sustaining economic growth, as he urged banks and corporates to join hands in driving fresh investments and reigniting the nation's entrepreneurial spirit.
"I look forward to working with regulated entities to improve the efficiency and effectiveness of our financial sector to ensure the benefits reach the people of our nation. On the demand side, I would urge the industry to invest boldly and champion the entrepreneurial spirit that defines our nation. Banks and corporates should come together and drive the animal spirit to create an investment cycle which is important at this juncture," he said at a banking-focused event.
Addressing 'FIBAC 2025', organised jointly by FICCI and IBA, the Governor, while speaking on India's macro-economic conditions, said that India is currently at a critical juncture as we navigate the choppy global economic environment.
"We need to push the frontiers of growth and seize the opportunities coming our way. Indian economy has expanded manyfold, and it continues to be a symbol of resilience and hope," he asserted, as per a FICCI press release.
RBI Governor further stated that the primary objective of monetary policy in terms of price stability has significantly contributed to the strength of India's macroeconomic fundamentals.
"At the same time, the Reserve Bank has not lost sight of the objective of growth. We will continue to conduct monetary policy with the primary objective of price stability, keeping in view the objective of growth," he noted.
He also highlighted that RBI will endeavour to enhance ease of doing business.
"We are in the process of consolidating all the regulations for various categories of regulated entities. In our pursuit of making a principle-based framework, we have given autonomy to the board of the respective entities to frame policies," said Governor Malhotra.
The Governor added that RBI will propose to set up a Regulatory Review Cell with the mandate to review each regulation in a comprehensive, objective, systematic and structured manner.
"The objective of the review shall be to assess each regulation with focus on efficiency; its impact in terms of cost and benefit; its requirement in the current context and market realities; consistency and clarity especially across different regulations; and potential of unaddressed or emerging risks, among other. The Cell shall organise its work in such a manner that each regulation is reviewed at least once in every 5-7 years. The Cell will interact with major financial sector industry bodies," he emphasised.
CS Setty, Chairman, IBA and Chairman, State Bank of India, said that India is at an inflection point and it is time to accelerate inclusive growth along with a sustainable future by charting new frontiers.
The financial services sector will have to play a pivotal role as a multiplier of growth, he added.
Setty also stated that banks have to play a significant role in India's growth story by fuelling innovation, lending to newer sectors, and driving the next wave of long-term capex.
"With a favourable demographic dividend, robust digital infrastructure, high growth potential, and a clearly articulated national vision under Viksit Bharat, India stands at an inflection point. This is the moment to accelerate inclusive growth, enhance global competitiveness, and shape a prosperous and sustainable future," he added.
Harsha Vardhan Agarwal, President, FICCI and Vice Chairman and MD, Emami Limited said that India stands at a turning point.
The world may be volatile, but India stands firm and is poised to rise even further amongst the global comity of nations.
Citing the findings of a recent survey undertaken by FICCI on Global Risks and opportunities, he said that the survey results show that despite the external challenges, industry is optimistic.
"Indian businesses see India as a future global leader in renewable energy, in defence and aerospace, in AI, and in digital technology," he said. "Prudence must always remain the foundation of Indian banking, but ambition must be the driver. Our banks cannot just finance growth; they must engineer it. The future of finance is not to follow the economy. The future of finance is to lead it. Indian banking sector will further support the growth of our industries and support enterprises as we weather the current storm."
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