RBI Governor Shaktikanta Das Warns Against Tech Disruptions In Financial Sector

Das stressed that while the current state of financial stability may be strong, sustaining and enhancing, it presents ongoing challenges that require continuous attention and improvement

The Reserve Bank of India’s (RBI) Governor Shaktikanta Das emphasised the central bank's vigilance towards emerging risks despite the Indian economy demonstrating robustness and resilience amidst global challenges. He cautioned about potential disruptions in the financial system stemming from advancements in new technologies around the world.

Das stressed that while the current state of financial stability may be strong, sustaining and enhancing, it presents ongoing challenges that require continuous attention and improvement.

“New technologies offer gains in efficiency and customer experience, but they can also bring with them sudden and widespread disruptions to the financial system,” Das noted in the foreword of the Financial Stability Report’s June edition, released on Thursday.

“This requires that all stakeholders not only invest adequately to take full advantage of technological advancements but also take steps to safeguard the security and soundness of their systems,” he added.

Shaktikanta Das noted that stress tests have indicated banks and non-banking financial companies (NBFCs) will maintain capital levels above regulatory minimums even in severe stress scenarios. Despite this stability, Das emphasised the regulator's vigilance towards emerging risks such as cyber threats, climate change impacts, and global economic spillovers.

In contrast to significant global financial risks, including high public debt levels, stretched asset valuations, and economic fragmentation amidst geopolitical tensions, Das highlighted the Indian economy's robustness. He pointed out that India possesses strong macroeconomic fundamentals and adequate buffers, showcasing resilience and strength amid global uncertainties.

“Economic activity is expanding at a steady pace, with the financial system being stronger and more vibrant than what it was before the onset of the recent period of crises,” Das said. He underscored the importance of building upon these achievements to foster a forward-looking financial system that effectively supports India's expanding economy.

“Furthermore, as India’s contribution to global growth rises, our financial system must also modernise and deepen as it prepares to go more global,” he said. Das emphasised the need to cultivate an ecosystem that prioritises customer interests at its core.