Don't Outsource Loan Processing Tasks: RBI To Bankers
It is important for the system to weed out the unethical elements at the earliest opportunity to ensure the credibility and the efficiency of the credit system in the country, he said.
"Several attempts are already underway, one of which is the establishment of a central fraud registry, which will enable quick sharing of information on entities found to be defrauding banks," Mundra added.
The RBI and IBA (Indian Banking Association) together have also taken upon themselves the circulation of "caution advices" relating to all types of frauds, including those pertaining to loans and advances, he said.
And added, efforts also need to be made to alienate the willful defaulters and fraudsters and debar them from accessing the banking system for further finance.
Cautioning banks against a herd mentality in rushing to fund specific sectors, Mundra asked them to assess credit risks before giving loans to sunrise sectors.
"I have seen herd mentality in banks, (to fund) some so-called sunrise sectors, where everyone rushes to finance that sector," he said.
On unseasonal rains and hailstorm in Northern India, Mundra said it is difficult to gauge its impact on inflation and no straight formula can be used to ascertain this.
Asked whether the RBI is contemplating to cut Cash Reserve Ratio (CRR) to prompt banks to cut lending rate, Mundra said, these tools are used for better macroeconomic situation.
"As and when there is need RBI will cut CRR rate," he said.
CRR is the portion of deposits which the banks are required to have in cash with the central bank.
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