Mumbai- Protecting depositors’ hard-earned money is a sacred duty for a banker, and more important than visiting a religious place, RBI Governor Shaktikanta Das said on Monday.
He said the task is more important because the entire banking system runs on deposits, which are accumulated from small savers, middle class and retirees.
“Protection of depositors’ money is the most important responsibility of a bank. It is a sacred duty. It is a sacred duty like going to a temple or masjid or gurdwara to bow down, it’s a sacred task. In fact, I would say this is much more,” Das said.
In the comments, made during a speech to directors of urban cooperative banks (UCBs), Das reminded the audience that this is the “biggest responsibility” cast on each one of them.
It is also the responsibility of the Reserve Bank to work with all the banks to ensure that depositors’ money is safe, and hence the Central bank keeps coming out with regulations and supervision efforts.
It can be noted that there have been multiple instances, especially in the cooperative banking space, where depositor monies are stuck because of challenges faced by the entities.
In many of these cases, irregularities by the management were the root cause of the problem, like the Punjab and Maharashtra Bank, a city-based UCB, which suffered challenges a few years ago.
Das said the RBI has created a four-tiered structure for UCBs with the perspective of better regulation and supervision of the over 1,500 entities that dot the landscape.
He also reminded that the entire banking system needs to be stable for smooth functioning of the economy, and the UCBs are an important part of the sector.
The Governor also told the audience that RBI’s strengthening of supervision for UCBs should not be seen as an attempt to pose impediments for their growth.
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