The Reserve Bank of India (RBI) governor Shaktikanta Das expressed his concerns about structural changes taking place in the financial sector as a faster pace of credit growth than deposit growth potentially exposes the banking system to structural liquidity issues, while speaking at a media event last week.
The new norms would also impact net interest margins (NIM) as the stock of low yielding g-sec rises in banks’ books, and intensify competition for retail deposits, the people cited above said.
Sebi’s investigation is based on the findings of Financial Conduct Authority, its counterpart in UK, for the period from January 1, 2006 to March 31, 2008.
