Growth key, but not with undue risks: RBI guv

Banks and non-banking financial companies (NBFCs) should not take "unacceptable risks" in the pursuit of growth and they must have robust risk mitigation framework, Reserve Bank of India (RBI) Governor Shaktikanta Das said here on Thursday.

- MANOJIT SAHA

He was speaking at the Global Conference on Financial Resilience organised by the College of Supervisors.

"Pursuit of business growth is important, but it should never come at the expense of taking on unacceptable risks," Das said. "While business models may be designed to drive profitability and growth, they sometimes contain vulnerabilities that may not be apparent," he said, adding that both regulated entities and supervisors need to be vigilant to risks, if any, in their business models.

The RBI Governor said robust risk mitigation ensures longterm success and resilience of a regulated entity as well as of the overall financial system.

"I wish to highlight the importance of ethics in governance, which involves compliance with laws and regulations, both in letter and spirit; pursuit of sustainable business practices; and avoidance of mindless pursuit of bottom lines," Das said.