The RBI has been vigilant about the pace of credit growth in the retail sector. RBI Governor Shaktikanta Das, in his Mumbai address on Tuesday, warned against unsustainable credit expansion. He highlighted the importance of aligning credit portfolio growth with risks and appropriate pricing. Das’s comments are part of a broader strategy aimed at avoiding a potential crisis that could arise from excessive lending.
In line with this cautious approach, Sitharaman has instructed public sector banks to concentrate on their fundamental activities of collecting deposits and extending loans, while also ensuring fair returns for depositors. This directive underscores a consistent theme of prudent yet effective financial management within India’s banking industry. The finance minister’s endorsement signals a commitment to safeguarding the banking sector by promoting responsible lending practices and protecting the interests of both lenders and depositors.
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