RBI<\/a> had rapped banks for being too risk-averse amid a crisis. \u201cRemaining overly risk-averse may seem to be a measure of self-immunisation; but will be self-defeating as it would affect the bottom lines adversely,\u201d RBI governor Shaktikanta Das had said. He had further observed that banks\u2019 risk management system should be sophisticated enough to smell vulnerabilities brewing within the various businesses well in advance.<\/p>\nBasu on Tuesday said there is a need to look at all underwriting standards, primarily those related to how banks understand the risk in a particular proposal. \u201cWe need to understand why certain companies are in stress and as long as they are so owing to extraneous factors like Covid-19, the entire banking community has risen to the occasion and supported all of them,\u201d Basu said. He added that even before the government schemes came, most banks had come forward to support industry and lent additional 10% funds.<\/p>\n
\u201cThe RBI also has given a lot of dispensations and they have been quite wise and sagacious. I am quite sure that the banks will respond to it and make sure we lend to the right companies,\u201d Basu said, adding, \u201cWe have to be prudential but have to go forward.\u201d Across sectors, as unlocking happens, banks will have to take an initiative and not shy away from lending.<\/p>\n
At the same time, they will have to avoid being reckless and relapsing into the same problems which impacted them just a few years ago. \u201cThis balance between the support to industry and the risk mitigation capacities is very crucial,\u201d Basu said.<\/p>\n
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