Growth, stability, and inclusion are top priorities, says RBI Guv Malhotra

One of the most important roles of the central bank is to spread financial inclusion, Malhotra said

Sanjay Malhotra, who assumed office as the twenty-sixth governor of the Reserve Bank of India (RBI) on Wednesday for a tenure of three years, stated in his first media interaction that fostering economic growth and ensuring stability in policy-making will be among his key priorities moving forward. Additionally, he highlighted that while much progress has been made with regard to financial inclusion, there is still more to be done, and collaboration with all stakeholders in the financial system is necessary.

 

“Ours is still an economy that needs to develop as we are entering the Amrit Kaal and to realise the vision of Viksit Bharat by 2047. The huge responsibility that we have is in ensuring that the growth this country actually has continues,” Malhotra said.

 

 

This assumes significance at a time when India’s gross domestic product (GDP) growth in the July–September quarter fell to a seven-quarter low of 5.4 per cent. Even the RBI, in its recently concluded monetary policy meeting, lowered its projection for GDP growth in 2024-25 from 7.2 per cent to 6.6 per cent.

 

“Stability in policy is very important. In my previous role, we were trying to give stability or continuity in policy. So, whether it is taxation policy, fiscal policy, or monetary policy, I think all businesses and all people need continuity and stability rather than a day-to-day kind of policy. So, we continue to uphold this value, this principle of stability,” Malhotra said.

 

Additionally, he said, “While stability is important, we are also aware that we are in a constantly evolving, changing world with geopolitical tensions, the impact of climate change, and political uncertainty around the world,” adding that while maintaining continuity and stability, the central bank must remain alert and agile to meet these challenges.

 

Commenting on financial inclusion, Malhotra said, “One of the most important roles of the central bank is to spread financial inclusion with the banking and non-banking finance companies under its hold.”

 

He said while significant progress in financial inclusion has been made, particularly in making banking services available and accessible to even the most remote corners of the country, much work remains, and collaboration among financial regulators will be crucial to achieve this.

 

“We must collaborate with financial regulators, as well as the central and state governments, to ensure that the benefits of formal financial inclusion reach every individual,” Malhotra said.

 

Further, he highlighted that there would be an increased focus on technology to reduce costs and make financial inclusion more accessible and pervasive.

 

“Innovation will be key, and while innovation will have to be fostered and supported, we will, of course, have to be conscious of the risks that it may entail. So, we have to put in place requisite safeguards and guardrails without stopping innovation,” Malhotra said.