RBI Governor advocates collaborative digital financial oversight
Sanjay Malhotra, Governor of the Reserve Bank of India, emphasized a collaborative approach to regulation and supervision in the digital age. Speaking at a global conference, he highlighted the need for agility, effective data use, and customer-centricity.
Partners in resilience, not adversaries
Governor Malhotra stressed that the Reserve Bank of India views its regulatory and supervisory roles as collaborative with regulated entities, not adversarial.
He stated that the success of the regulator is measured by both stability and dynamism in the financial sector, aligning with the regulated entities' long-term growth objectives.
Regulations are finalized through a consultative approach, and entities also engage in self-regulation via internal controls and governance.
This shared responsibility ensures systemic resilience, customer service, and economic growth.
Malhotra underscored that regulation functions optimally when banks perceive supervisors as partners in fostering resilience, a crucial perspective for India's financial intermediation and inclusive growth.
Leveraging data for agile supervision
The Governor highlighted the effective use of data as a critical component of modern supervision, noting initiatives to streamline reporting and improve data quality, such as the Supervisory Data Quality Index (SDQI).
Malhotra advocated for stronger analytics and supervisory dashboards to enhance off-site surveillance, enabling more continuous monitoring and early risk detection.
This shift aims for supervision to be more off-site, near real-time, and increasingly leverage SupTech and AI-enabled tools, while maintaining human judgment.
He also emphasized customer-centricity, ensuring digitalisation aligns with fair consumer outcomes and protecting against rising digital frauds through collaborative analytics.
Digital age, timeless principles
Malhotra rightly emphasizes that core regulatory principles must endure amidst digital transformation.
Human accountability, not automation, remains the ultimate safeguard for financial stability.
This balanced view is crucial for ensuring innovation strengthens, rather than compromises, oversight.