Deposit insurance and deposit insurers are essential components of a stable and trustworthy financial system, according to Swaminathan J, the Deputy Governor of Reserve Bank of India (RBI). They not only help in maintaining public confidence by protecting depositors but also play a crucial role in promoting overall economic growth. By providing a financial safety net, the deposit insurers contribute significantly to financial stability. It has become imperative for the regulators and the deposit insurers to realign their policies and regulations to enable banks to better manage and enhance their risk management capabilities, especially liquidity risk management. The rapidly changing financial landscape will keep on throwing new challenges in the field of deposit insurance, he noted.
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