Key Points:
- While commenting on the banking crisis in the United States, the governor of the RBI warned about the threats cryptocurrencies represent to the financial system.
- He emphasized the need of good asset liability management in light of the American financial crisis.
- The Indian economy, according to the central bank head, is resilient.
The current US banking crisis, according to the governor of India’s central bank, the Reserve Bank of India (RBI), plainly highlights the threats cryptocurrencies present to the financial system. The central bank governor also said that the Indian economy is resilient, highlighting that the worst of the inflationary period is passed, Bitcoin.com reported.
The Indian banking system is strong, and the present banking crisis in the United States will not damage the country’s financial sector, according to RBI Governor Shaktikant Das, addressing a memorial gathering for Federal Bank founder KP Hormis.
While remarking on the US banking crisis at the 17th K P Hormis Memorial Lecture on Friday, India’s central bank governor warned about the threats cryptocurrencies represent to the financial system.
Banks face both direct and indirect threats from cryptocurrency and assets. To avoid bank fraud, laws must be enacted. According to Shaktikanta Das:
“Ongoing U.S. banking crisis drives home the importance of robust regulators, sustainable growth and clearly shows risks of private cryptocurrencies to the financial system.”
Notwithstanding the fact that central bank limitations during the Covid and Ukrainian wars had an influence on the global economy, the Governor predicted that India would emerge as one of the world’s leading economies.
Das was alluding to the recent bank failures in the United States. The New York State Department of Financial Services seized Signature Bank on Sunday, while officials shut down Silicon Valley Bank on Friday. They were the second and third biggest banks in the United States to collapse. Silvergate Bank also declared voluntary liquidation earlier this month.
The latest event emphasizes the need of banking sector regulation and oversight. It’s also a reminder to banks to balance their assets and obligations, as well as to create enough reserves in case of an unanticipated catastrophe.
Banks must also correctly assess interest rate-related risks and, more generally, concentrate on discovering the fundamental cause of susceptibility rather than dealing with symptoms alone, according to Das.
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