NEW DELHI: As India aims to become the world's third largest economy soon, the banking sector is undergoing a decade-high performance in financial metrics, according to Swaminathan J, Deputy Governor of the Reserve Bank of India (RBI).
According to him, the central bank is busy improving the auditing process to safeguard the integrity and stability of financial institutions.
"Auditors and chief financial officers are key pillars of financial integrity and governance in our banking system. Auditors must apply due rigor in their audit processes to mitigate any potential for divergence, under-provisioning, or non-compliance with statutory and regulatory requirements, said Swaminathan at a conference in Mumbai.
Swaminathan said that the RBI has introduced structured meetings between supervisory teams and auditors, exception reporting, and streamlined auditor appointment processes.
He also cautioned Chief Financial Officers against the evergreening of loans and fraudulent transactions through certain bank accounts with large corpus amounts without valid reasons.
Swaminathan also emphasised the importance of collaboration between stakeholders in the banking financial system.
Meanwhile, India's Financial Inclusion Index (FI-Index) for the financial year ended March 31, 2024, improved to 64.2 compared to 60.1 in March 2023, with growth witnessed across all sub-indices, the RBI announced.
The improvement in the FI-Index reflects a deepening of financial inclusion across the country.
There has been a renewed national focus on financial inclusion, promoting financial education and literacy and making credit available to productive sectors of the economy including the rural and Micro, Small and Medium Enterprises (MSME) sector which has led to the improvement in the FI-Index.