M Rajeshwar Rao, Deputy Governor, Reserve Bank of India, has called upon financial institutions to have strong capital buffers to absorb potential losses and sustain the credit flows.

Financial institutions should be aware of the rising cyber risks; strive for good governance and practice ethical behaviour as these are the core for a strong financial services industry.

Rao was speaking at the virtual session of the 29th edition of the ‘Mind to Minds’, a motivational lecture series organised by Muthoot Pappachan Group for their employees.

Green finance

He stressed upon the need for strategies that allow capital, labour, skills, and innovation to shift to new purposes so as to build a greener, stronger and resilient post-Covid economic environment. The impact of climate change and the need for green finance and environmental friendly activities have to be factored while planning for growth, he said.

Rao suggested that the businesses should seize the current opportunity to lay the foundations for a durable, equitable, and sustainable global economy. He is also highly optimistic that the negative effect of the pandemic on the economy is showing a reversing trend. Various high frequency indicators also suggest a higher future growth. At the same time, he cautioned that the recent surge in Covid cases pose a downside risk to recovery.

Thomas John Muthoot, Chairman, Muthoot Pappachan Group and Managing Director, Muthoot Fincorp, pointed out that the various initiatives of the government and the RBI has helped banks and NBFCs with adequate liquidity. The higher purpose of Muthoot Pappachan Group and Muthoot FinCorp is to “transform the lives of the common man through their financial well-being”.

The Group would follow the highest degree of ethical standards and corporate governance to ensure fair treatment to its customers, who primarily belong to the low-income group, he said.

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