New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said businesses should avoid having an aggressive short-term reward-seeking culture without considering the build-up of excessive risks in their balance sheets.
According to Das, running business involves risks. However, before taking the risk, the benefits and drawbacks must be thoroughly examined. "Businesses should avoid aggressive short-term reward-seeking mentality without concern for the build-up of excessive risk in the balance sheet," Das said during a speech commemorating the 75th anniversary of India's independence as part of the Azadi Ka Amrit Mahotsav'. The Central Board of Indirect Taxes and Customs (CBIC) hosted the event in New Delhi
Improper funding structure, developing asset liability mismatches, which are very dangerous and not sustainable, are some of the common characteristics of some of the inappropriate business models or strategies that have come to the RBI's attention, he added.
Furthermore, he observed that unrealistic strategic assumptions, particularly overconfidence in capabilities, development possibilities, and market trends, might lead to poor strategic decisions. The RBI has mandated a slew of disclosures for its regulated firms to ensure that all material information in their financial statements is fully disclosed, the RBI Governor said.
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