Extreme risk aversion self-defeating: RBI Governor warns banks

Mumbai: RBI Governor Shaktikanta Das  warned banks that being overly risk averse will be self-defeating and that lenders will not be able to “win their bread” if they do not carry out their basic task.

Speaking at a webinar organised by financial daily Business Standard, Das said, rather than becoming averse to lending, banks have to improve their risk management and governance frameworks, and also build sufficient resilience.

Bankers point out to past experiences and feel that containing loans from getting sour is an important objective. Das said there is a scope for banks to improve their ability to avert frauds from happening and added that their risk frameworks should be able to smell vulnerabilities.