Banks and NBFCs Drive India’s Credit Growth; RBI Sanjay Governor Malhotra Warns Close Monitoring Needed

RBI Governor Sanjay Malhotra has highlighted the growing dominance of banks and NBFCs in India’s credit market, stressing the need for close monitoring. 

With these institutions accounting for a major chunk of the country’s credit needs, the central bank warns that careful oversight is crucial to ensure stable and balanced credit growth, especially amid a complex global economic environment.

“Banks and NBFCs continue to occupy a major chunk of our credit needs; these RBI-regulated entities must be monitored to keep credit needs in check,” he said.

He stressed that regulatory oversight is essential for both small and large entities to maintain balanced and sustainable credit growth.

Monetary Policy Ensures Economic Stability
Malhotra underlined that monetary policy remains a key tool for macroeconomic stability. Despite global economic shocks, India has seen a decline in inflation, showcasing the effectiveness of RBI interventions. “RBI will continue to conduct monetary policy with the objective of price stability and economic growth,” he added.


Expanding Credit While Maintaining Oversight
The RBI is actively exploring measures to expand bank credit to fuel India’s economic growth. Malhotra emphasised, “Monitoring banks and NBFCs is key to ensuring that credit growth remains sustainable and financial stability is preserved.”

Strong Reserves and Vision for Prosperity
India’s foreign exchange reserves stand at a robust $695 billion, covering 11 months of merchandise exports. Looking ahead, Malhotra said, “Generations of freedom fighters gave us a ‘Swatantra Bharat’, a free India, and now we must work for a ‘Samriddh Bharat’, a prosperous India.”
 

He also added that RBI is examining measures to expand the bank credit and going to propose a regulatory review cell which is going to review all regulations at least once in 5-7 years.