Governor of the Reserve Bank of India (RBI) Shaktikanta Das cautioned depositors against chasing high returns because they come with a higher risk. He said, it's vital to remember that larger profits or higher interest rates are usually connected with increased risks, and that depositors must be cautious as well.
"Just because a bank is giving a higher interest rate does not mean that depositors should put their money in to chase such big profits," Das added. However, he stated that there are institutions that are still viable and offer greater interest rates, but depositors should always be cautious. The Reserve Bank remains dedicated to ensuring that the banking system stays robust and resilient, but it must be a collaborative effort, Governor stated at the 'Depositors First' event today.
"The RBI has taken a proactive approach to strengthening regulatory rules, strengthening supervisory processes, and looking at things that would ensure that banks function in a highly resilient manner in the future." "I had mentioned that the country has proved working together during this entire pandemic and India's moment has come when India can become a growth driver for the world economy," Das added, referring to his recent monetary policy statement. It will be achievable if all banking system stakeholders work together, he noted.