The Reserve Bank of India’s latest policy measures have been welcomed by banking industry leaders, with the chairman of the country’s largest lender describing the central bank’s approach as a careful balancing act between supporting economic growth and safeguarding financial stability.
Speaking on the RBI’s recent announcements, Challa Sreenivasulu Setty, who heads both State Bank of India and the Indian Banks’ Association, said the regulator had adopted a prudent stance in the face of continuing global uncertainties.
According to Setty, the RBI’s measures aimed at attracting foreign capital are both timely and comprehensive. The central bank has proposed steps to encourage inflows through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, investments in government securities, overseas borrowings and equity investments.
Industry experts believe these initiatives could help strengthen India’s external finances at a time when global markets continue to grapple with geopolitical tensions, volatile capital flows and shifting interest rate expectations.
Setty noted that the measures are expected to boost capital inflows into the country, while also contributing to the development of domestic bond markets. Improved liquidity conditions could support financial institutions and businesses, while additional foreign exchange inflows may provide support to the Indian rupee.
The SBI chairman also highlighted the importance of the proposed regulatory guidelines, describing them as evidence of a proactive policy approach by the RBI. He said the measures are designed to reinforce India’s macroeconomic fundamentals and strengthen resilience against external shocks.
The comments come as policymakers seek to maintain momentum in economic growth while ensuring that India’s financial system remains resilient amid an uncertain global environment.
