RBI Vigilant of Emerging Vulnerabilities, Will Keep Financial System Resilient: Governor
Reserve Bank of India (RBI) Governor Sanjay Malhotra has said the central bank remains vigilant about emerging vulnerabilities in the financial system and will continue working to preserve financial stability. He stressed that current resilience should not lead to complacency, as risks can emerge from global financial conditions, geopolitical developments, technology, cyber threats and interconnected financial markets. The Governor said the RBI would continue to monitor these vulnerabilities and take appropriate measures to ensure the financial system remains resilient.
Malhotra pointed to the importance of maintaining strong bank and NBFC balance sheets, adequate capital and liquidity buffers and effective risk-management systems. He also highlighted the need to identify vulnerabilities early rather than responding only after they develop into financial stress. As financial risks increasingly cross institutional and geographical boundaries, monitoring individual institutions alone may not be sufficient. A broader system-wide assessment is needed to understand how shocks can move across banks, NBFCs, markets and financial infrastructure.
For banks and financial institutions, the message reinforces the importance of stress testing, scenario analysis, cyber resilience, operational resilience and continuous risk monitoring. Financial strength provides an important buffer, but resilience needs to be maintained as conditions change. The RBI’s approach therefore places emphasis on early identification of emerging risks and strengthening institutional preparedness so that unexpected shocks do not undermine financial stability.
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