RBI Governor Shaktikanta Das on Thursday cautioned banks to take extra care to manage their asset-liability mismatch amid the crisis caused by the collapse of the shadow banking sector in India.
The governor said that banks should remain vigilant and take proactive measures to manage their asset-liability mismatch as well as liquidity risk. He added that banks should closely monitor their loan and investment portfolios, and take corrective actions wherever necessary.
Das said that banks should also ensure that their exposure to the shadow banking sector remains within prudent limits, and that they should be aware of their counterparty risk.
The RBI governor also pointed out that banks should be mindful of the fact that the situation in the shadow banking sector could continue to be uncertain in the near-term, and hence they should remain vigilant and prepared for any eventuality.
The RBI governor’s comments come in the wake of the crisis caused by the collapse of the shadow banking sector in India due to the default of several infrastructure lenders. This has resulted in a liquidity crunch for some NBFCs, which in turn has affected the ability of banks to lend.