In the post policy press conference, RBI Governor Sanjay Malhotra clarified on several issues ranging from HDFC Bank, core inflation data to measures to reduce rupee volatility.
Excerpts from the conference:
On HDFC Bank
We had issued a press release and I will repeat — we did not find any material concerns related to governance or conduct. We did not find anything in our supervision or in their records that had anything related to governance or conduct. Generally, in our supervision we check the minutes and we also have a record of the minutes. Only after checking all of them, we had issued a press note
On any signs of stress in the banking system due to the war and transmission of rates
In so far as from the bank side, we are not seeing any systemic concerns with regard to their profitability and their health. Yes, there will be pockets, there will be sectors which will be hit because of the present crisis. The government has done a wonderful job as of now in trying to secure these inputs and reduce the supply chain disruptions. It will all depend on how long this continues. In the meanwhile, you are aware that we have already extended the time limit from March 31 to January 30 for the longer period of exports proceeds to be repatriated to 450 days till June 30.
Against 125 basis points, about 90 basis points has been the transmission that we have seen on the lending side. Similarly, on the deposit side, it is more than 100. So, there has been good satisfactory transmission.
On disclosing core inflation data projection separately for the first time
This has been a request, which has been there from the market participants. This has always been a factor in monetary policy decision making. But we thought that this was the right time to give our projections on core, which we have been doing internally. We did the five yearly review and there was a second five yearly review, which was completed. For us, it’s the headline, which is the target. And we have to ensure that it’s headline that remains at target and within the band. That’s the goal. That’s the primary goal for us. But at the same time, the various components of inflation and where they are emanating from are also very important.
On the steps taken to curb rupee volatility and depreciation
We did notice that in the last few weeks of last month, March, there was heightened volatility in the forex markets. We saw that positions were being built up, leading to arbitrage positions between the non-deliverable forward markets and the deliverable markets. In normal times, these linkages are important for an efficient price discovery.
It has been our endeavour to widen and broaden and make more liquid these markets. But when there is excessive volatility, when there is excessive building up of positions, there is only increasing volatility and perhaps not helping in price efficient price discovery, such kind of measures are taken. These are reactions to the specific market movements. These are not, in any sense, they are not signalling any structural change. We stand committed to the development, broadening and deepening of these markets to the internationalisation of the rupee. And so obviously, you know, these are not measures which are going to remain there forever.
On the recent episodes of frauds in some banks
I want to assure everyone through the media present over here that the banking system is very resilient, it is very safe, strong. The number of regulations, whether it is related to conduct, governance, prudence, liquidity, all of them, along with our supervisory framework, they keep the banking system very healthy and robust. These are episodes.
Unfortunately, these are not even bank specific, these are more in the nature of crimes. While we have to be vigilant and alert to them, the law enforcement mechanism, obviously, in our country will also take care of this. These are entity specific developments, do not pose any systemic risk at this point in time. As we have clarified that as they play out, we deal with them on a bilateral basis as they play out.
The banking system as a whole remains resilient and we continue to focus on improving the conduct related matters and governance related matters and banks are by and large run on very professional lines. Any material supervisory concerns as and when it arises are dealt with on an event specific basis. If anything requires at a system level or a regulatory tweak, then we are not averse to taking such measures.
Published on April 8, 2026