The RBI Governor warned Bank that both are harmful to financial stability .He also suggested that current crisis in the US banking system appears to have originated from such mistakes.
The RBI Governor lectures in Kochi and he was quick to acknowledge and assure that the domestic financial sector is stable.
The Governor focus most of speech on India’s G20 Presidency and in this contest he called for more coordinated attempts by the group of World’s 20 largest economies to help those countries with high external death risk due to US dollar rise.
RBI Governor further said that we have nothing to fear as our external debt is manageable and does appreciation of the greenback does not pose any problem to us.
On the US banking crisis where to mid sized Bank Silicon Valley bank and first Republic bank with over USD 200 billion in balance sheets each went belly, last week he said on going crisis drive homes the importance of robust regulations that focus on Sustainable build up either on acid side or liability side.