The Governor of Reserve Bank of India (RBI), Shaktikanta Das, said on Thursday that a resilient future-ready bank needs to be financially, operationally and organisationally strong.

Addressing the global conference on financial resilience organised by the College of Supervisors here, Das said that in order to be resilient, a bank should have adequate capital buffers and should be able to generate earnings even in times of severe macroeconomic shocks.

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“It should also have adequate liquidity to meet its obligations in various situations. Therefore, financial resilience is closely linked to a bank’s business model and strategy. The Reserve Bank has, therefore, started looking at the business models of banks more closely,” Das said.

Hinting at cyber risks, the RBI Governor said that it has been identified as the foremost in top 10 operational risks for 2023 based on a global survey of financial institutions.

“Robust IT and information security governance will help in increased predictability and reduction of uncertainty in operations, minimise losses from information security related incidents and enhance operational resilience,” he noted.

Das said that even the G20 Finance Ministers and central bank Governors are focusing on risks arising from third party dependencies.

“The RBI has taken a slew of measures in the recent years with the usage of advanced analytical and surveillance tools along with techniques like phishing simulation and cyber reconnaissance exercises to push for enhanced IT and cyber security governance processes in banks and other supervised entities.

“In the context of the growing exposure of regulated entities (REs) to various risks from dependency on third-parties which provide technology and IT-enabled services, the Reserve Bank had on April 10 issued comprehensive guidelines on information technology outsourcing by banks, NBFCs, and other regulated entities,” he added.

“In recent times, we have seen a proliferation of digital lending by NBFCs, FinTechs and loan apps. Such lending also brought with it certain challenges, especially with regard to fair practices and consumer protection.

“To address these challenges, the Reserve Bank had laid down comprehensive guidelines for digital lending in September 2022. These guidelines aim to ensure that lending activities are conducted by the REs and their partners such as loan service providers in a prudent, fair, transparent and responsible manner,” Das concluded.