Swaminathan J, Deputy Governor of Reserve Bank of India noted in a latest speech that in a developing economy like India where private capital sources are limited, it is the banking system led financing model that comes to drive capital expenditure. The financial institutions, therefore, must maintain a sound financial position and strong balance sheet to support significant investments in infrastructure, industry, and innovation to fuel Indias economic growth. He further stated that the financial health of both corporates and financial institutions is at its strongest level in decades. However, for sustaining this financial stability, the sector must prioritise financial and operational resilience alongside strong corporate governance. Further, banks and financial institutions need to strengthen their internal defence mechanisms, namely their assurance functions, cultivating a culture of compliance and fair play to ensure they retain the regulators, and more importantly, their customers trust, at all times.
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