“While such practices may yield short-term gains, they ultimately expose the bank to significant long-term risks, including reputational damage, supervisory scrutiny, and financial penalties,” Shaktikanta Das said in a keynote address at the Conference of Directors of Private Sector Banks here.
| Photo Credit: Thulasi Kakkat

RBI Governor Shaktikanta Das on Monday (November 18, 2024) asked bank boards to strengthen internal governance framework to curb unethical practices, such as mis-selling of products or opening of accounts without proper KYC verification.

Mr. Das also said that the incentives for bank staff should be carefully structured so as not to encourage them to indulge in unethical practices.

“While such practices may yield short-term gains, they ultimately expose the bank to significant long-term risks, including reputational damage, supervisory scrutiny, and financial penalties,” he said in a keynote address at the Conference of Directors of Private Sector Banks here.

Mr. Das further said that the Indian banking sector is transitioning through a time which is replete with opportunities as well as risks and challenges.

“The banking sector remains strong and stable. All the financial indicators have improved since we met in May last year, reflecting the efforts of the various participants of the banking sector, including their management and boards,” he said.

To keep the resilience of the banking system intact, the governor emphasised that strong fundamentals ought to be leveraged to reinforce and fortify the defences.

“Good times, after all, are the best times to reinforce resilience and grow sustainably,” he added. Mr. Das also said that in the rapidly evolving and technology-driven environment, organisations face significant challenges and risks.

Factors like technological advancements, the rise of new-age fintech entities, third-party dependencies and climate change are reshaping the economic landscape, he added.

Amid these shifting tides, bank boards should serve as a lighthouse for lenders and provide steady guidance to help navigate these challenges and steer towards safe and prosperous shores, he said.

 At the interbank foreign exchange, the domestic unit opened at 83.24 against the dollar and then touched an early high of 83.22, registering a gain of 5 paise over its previous close. File
| Photo Credit: Reuters

The rupee appreciated by 5 paise to 83.22 against the US dollar in early trade on Tuesday supported by a positive trend in domestic equities.

Forex traders said the rupee is trading in a narrow range as sustained foreign fund outflows and strength of the American currency in the overseas market weighed on investor sentiments.

At the interbank foreign exchange, the domestic unit opened at 83.24 against the dollar and then touched an early high of 83.22, registering a gain of 5 paise over its previous close.

On Monday, the rupee settled at 83.27 against the US dollar.

“This week, on the domestic front, no major economic data is expected to be released but on the global front, from US the dollar could react to Fed member’s speech and a couple of important economic data from the US,” said Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial.

Somaiya further noted that “we expect the USDINR(Spot) to trade sideways and quote in the range of 83.05 and 83.50.” The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 per cent higher at 106.30.

Brent crude futures, the global oil benchmark, rose 0.02 per cent to $89.67 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 325.65 points or 0.49 per cent higher at 66,492.58. The broader NSE Nifty advanced 98.15 points or 0.5 per cent to 19,829.90.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they sold shares worth ₹593.66 crore, according to exchange data.