The Reserve Bank of India's (RBI) recently appointed governor, Sanjay Malhotra, stressed the value of continuity, stability, and inclusivity in the formulation of public policy. Malhotra emphasized these values as the cornerstone of his leadership style and said the RBI is an organization that has both a strong commitment to the general welfare and the flexibility needed to meet modern challenges.
During his first press conference as the Reserve Bank of India's 26th governor, Sanjay Malhotra called his new position "both an honor and a significant responsibility."
Reflecting on the role of the institution, Malhotra stated, "The RBI, now in its 90th year, is built on the foundations of stability, trust, and growth. These principles are integral to our policy approach as India progresses toward its vision for 2047."
During the policy review meeting on December 6, 2024, the central bank, led by Shaktikanta Das, Malhotra's predecessor, kept the repo rate at its present level for the eleventh straight occasion.
Even though economic growth slowed to a seven-quarter low of 5.4% during the July–September period, the RBI stressed the significance of continuing its fight against inflation. Inflation based on the Consumer Price Index (CPI) was 6.21% in October, well above the 4% target set by the RBI and above its upper tolerance range of 6%.
Emphasis on Continuity
“Businesses and individuals depend on continuity and stability in fiscal, monetary, and taxation policies,” Malhotra stated, emphasizing the importance of consistency and predictability.
He added, “Sudden shifts can lead to uncertainty. Therefore, we will ensure that our decisions are well-considered, transparent, and aligned with the public interest.”
The governor also acknowledged the ever-changing global landscape, emphasizing the need for adaptability.
“While stability is crucial, we must stay vigilant and agile in tackling challenges such as geopolitical tensions, climate change, and advancing technologies,” Malhotra stated. He further highlighted the RBI's continued focus on promoting financial inclusion as a key priority.
“We have made significant strides in expanding banking services across the country, but there is still more to be done,” Malhotra remarked.
He emphasized that collaboration with various stakeholders, including central and state governments and financial regulators, would be crucial to achieving universal access to formal financial services.
Harnessing Technology
A strong advocate for technology, Malhotra stated that the RBI would leverage innovation to improve efficiency and accessibility. “The success of platforms like UPI highlights India’s potential to lead in financial technology. We will continue to use technology to reduce costs, expand access, and promote inclusive growth,” he affirmed.
“However, we must strike a balance by implementing safeguards to mitigate risks without hindering innovation,” Malhotra remarked. Concluding his address, the governor underscored the significance of public consultation and knowledge sharing in the policymaking process.
“The RBI does not hold a monopoly on knowledge. Engaging with stakeholders and integrating diverse expertise will ensure that our policies effectively serve the public interest,” he added.
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