The conflict in the Middle East remains a major concern for the Indian economy, while artificial intelligence (AI) and technology are expected to play a crucial role in the banking system, RBI Governor Sanjay Malhotra said in an exclusive interview with DD News
Speaking on the broader economic outlook, the RBI Governor said the current policy framework remains strong and growth-oriented, adding that the state of the Indian economy continues to be robust.
On the banking sector, he said capital adequacy currently stands above 17%, while the statutory liquidity ratio is above 120%, indicating a healthy financial system. He also said there are no signs of concern in any segment of bank lending, despite higher growth in gold loans and MSME credit.
The Governor said the RBI will continue to "wait and watch" the evolving situation in the Middle East. He added that the monsoon remains a key monitorable for the agriculture sector.
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On inflation, the Governor said price pressures are currently being driven by supply-side factors. He reiterated that the RBI's objective is to keep headline consumer price index (CPI) inflation within the desired range.
Commenting on the external sector, the Governor said the Indian rupee remains relatively stable, aided by measures taken by the RBI and the government. He added that the country's balance of payments is expected to remain strong over the medium term.
The Governor also said India's fiscal and monetary policies remain well coordinated. Looking ahead, he said AI and technology will play a vital role in the evolution of the banking system.
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