Banks need to look beyond bulk deposits to fund loans': RBI

The Reserve Bank of India (RBI) emphasized the need for banks to reduce reliance on wholesale deposits and monitor risks associated with loans and trading amid interest rate fluctuations. Regulatory measures have successfully slowed consumer lending, contributing to financial stability. \r

The RBI aims to issue guidelines in FY25 on strengthening financial intermediaries, including a review of income recognition norms and a move towards an expected credit loss approach. Final guidelines on securitizing stressed assets and reviewing interest rate instructions are also expected. \r

The RBI underscores the importance of frequent interactions with supervised entities to enhance supervisory intervention effectiveness and prioritize governance and assurance functions.