New Delhi: The Reserve Bank of India (RBI) on Wednesday said it does not see any major concern over allegations that banks are resorting to 'window dressing', asserting that its supervisory mechanism is robust enough to detect and address any violations.
Follow The PSUWatch Channel on WhatsApp
RBI Governor Sanjay Malhotra said window dressing, wherein a lender spruces up numbers on key metrices like deposits ahead of the close of a quarter to show strong results, does not provide any real benefit to regulated entities as stakeholders and customers are well aware of the underlying financial position of banks.
"Nobody gains anything from window dressing. Even if a bank or any regulated entity resorts to such practices, today's stakeholders and customers understand that it neither changes the underlying reality nor has any material impact on the balance sheet," Malhotra said during the post-policy press conference.
Follow PSU Watch on LinkedIN
Malhotra said the central bank's instructions on such practices are clear and supervisory officers closely monitor compliance.
"If any regulated entity is found to have deviated from the rules or engaged in such practices, we take appropriate action," he added.
RBI Deputy Governor Swaminathan J said the banking system remains resilient and any isolated instances are dealt with through the supervisory process rather than in the public domain.
"It is not easy for anyone to sustain a projected picture that is not reflective of the true and fair position of the underlying conditions," he said.
He added that banks and non-banking financial companies remain resilient despite economic volatility, with the RBI continuing to monitor regulated entities through on-site and off-site supervision and taking action wherever non-compliance is detected.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)