PM Modi sets high expectations for RBI in the next decade as it marks 90 years

Prime Minister Narendra Modi today emphasized to the Reserve Bank of India (RBI) that the decisions made regarding policies and regulations today will determine the future direction of the central bank for the next decade.

“This decade will mark the institution's journey towards its centennial,” he remarked at the RBI’s 90th anniversary event in Mumbai. Also present were Finance minister Nirmala Sitharaman , Maharashtra chief minister Eknath Shinde and his two deputy chief ministers.

“We must establish clear targets for the next 10 years,” Modi asserted. In an audience , there were industry stalwarts like N Chandrasekaran, Tata Sons Chairman , Reliance’s Mukesh Ambani , SBI Chairman Dinesh Khara and other CEOs of public , private and foreign banks.

Modi encouraged the RBI to devise innovative out of the box policies, stating, “Shaktikantaji is good  at thinking outside the box.”

The major issues highlighted today by the PM are following:

Emergence of digital transactions

Modi stressed the need to expand digital transaction possibilities ( use cases)  and monitor changing behaviors due to a cashless economy. He stressed upon improving financial inclusion and empowerment efforts.

Differentiated banking requirements

PM Modi talked about the diverse banking needs within the country because of its huge population, highlighting the necessity for policies facilitating ease of banking and credit access to all. In fact , there is already a differentiated banking platform of small finance banks and payments banks catering to the bottom of the pyramid.

AI and ML

Modi advocated leveraging AI and ML technologies, acknowledging their transformative impact on the banking sector. He also talked about the importance of cybersecurity and supporting fintech innovators.

Exporting the inflation-growth dynamics model to the Global South

Modi underscored the significance of balancing inflation control and growth for developing countries, suggesting the RBI take a leadership role in promoting this model globally.

Funding new sectors and youth aspirations

Modi identified emerging sectors such as renewable energy, digital technology, and defense, urging adequate credit support for their growth.

Space and tourism sectors

Modi highlighted the opening up of the space and tourism sectors, urging RBI to prepare for providing credit support and developing expertise in these areas.

Studying rising debt

Modi called for a study on rising private debt levels, pointing countries where debt exceeds GDP. He suggested the RBI undertake this analysis.