Reserve Bank of India (RBI) governor Shaktikanta Das wants banks in India to care more for depositors than borrowers. It’s their money, after all, that is being handed out to do business. At an industry event on Wednesday, Das also held financial stability as a top priority, and said that the central bank was ready to do more for economic growth.
His comments seem to indicate RBI’s stance on the issue of granting an interest waiver to borrowers who availed of the covid moratorium. By one recent estimate, banks could lose ₹2 trillion should such relief be awarded. This will stretch the finances of banks, which are already under the strain of bad loans. It doesn’t help that bank scandals over the past few years have shaken people’s faith in the safety of their money, even as the news is mostly about either relief for debtors or the provision of more loans. It’s also well known that the government is short of funds to recapitalize banks. Das has spoken up for savers, and that’s good. It would be even better if they could look forward to remunerative rates of interest on deposits. For this, inflation needs to be quelled, and that may not be easy.
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