Reserve Bank Governor Shaktikanta Das, in a speech at the second global conference on financial resilience organised by the College of Supervisors in Mumbai on Thursday, highlighted the importance of maintaining constant vigilance in the banking sector.

Speaking at the event, Governor Das brought attention to past instances of significant banking failures worldwide. He addressed the crisis in the United States following the collapse of First Republic and Silicon Valley Bank in 2023. The central bank governor also referenced the downfall of the Swiss giant Credit Suisse, which UBS, another major Swiss bank, subsequently acquired.

Expressing concerns about global ‘supervisors’ lagging behind economic cycles, the central bank governor emphasised the critical need for enhanced supervision, particularly in detecting the early signs of crises and deploying effective mechanisms to prevent them.

He said that timely measures on unsecured loans have slowed down their growth. “We thought it is better to act in advance and slow down the credit growth in these segments,” Das was quoted as saying by the Hindustan Times.

Regarding supervision, the RBI governor stressed the need to anticipate the development of a crisis and take timely action. “It is our endeavour to smell a crisis. Supervision has become a very complex task,” he added.

The RBI governor also added that the Indian financial system is now in a significantly stronger position than it was during the Covid-19 pandemic.

“We need to realise it is a complex world, and our supervisory methods should be our best endeavour to remain in sync with time. Not only in sync with times but to see stress before it builds up,” Das said.