RBI Governor Malhotra Calls Bank Lapses Isolated Episodes
Why in the news
At the post-policy press conference, the RBI Governor tried to calm concerns after trouble at a private bank and a co-operative bank.
Key facts
- Malhotra described the cases as episodes possible in any large system with many players.
- Multi-layered safeguards, namely business units, compliance and audit, reduce how often and how badly such events occur.
- He called the system, covering cooperative banks, NBFCs and SCBs, safe and robust; RBI has early-warning systems and takes preemptive and corrective action.
| Bank | Issue | Action |
|---|---|---|
| IndusInd Bank | Derivative portfolio discrepancy; expected net worth impact 2.35% | PwC for independent validation; external firm for forensic review; depositors told not to act on rumours |
| New India Co-operative Bank | Alleged fund misappropriation | Board superseded for 12 months; administrator appointed; business curbs |
Regulatory approach
- RBI continues to build up regulations, supervision and enforcement.
- Targeted steps aim to protect depositors and system integrity.
- Stronger internal controls and institutional cooperation are needed for better risk governance.
Exam angle
- Who: RBI Governor Sanjay Malhotra.
- Board supersession period: 12 months.
- Auditor named at IndusInd: PwC.