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In a move to safeguard India's financial stability against a backdrop of global economic shifts, the Secretary of the Department of Financial Services (DFS), on Thursday stressed the need for strengthening risk culture across banks, saying risk management must become a core strategic capability amid growing global uncertainties and evolving cyber threats, according to the Ministry of Finance.
Speaking at the inaugural session of the first Indian Banks' Association (IBA) Summit on Risk Management in Mumbai, Nagaraju said, "In an era of global uncertainty, strengthening our risk culture is the ultimate competitive advantage for Indian banks." "Risk management, therefore, must be embedded in the culture of every bank," he said, urging institutions to integrate it across all banking functions. The summit, themed "Navigating Uncertainty: Building Resilient Banks", was also addressed by IBA Chairman and State Bank of India Chairman CS Setty, who outlined the banking industry's strategic priorities for institutional resilience. During the session, Nagaraju unveiled a comprehensive industry risk survey and a commemorative essay compendium featuring the top 30 entries from a nationwide competition that received over 650 submissions from banking professionals. Highlighting the resilience of the Indian banking sector, the DFS Secretary said that despite multiple challenges, "the economy is growing well and the banking sector is stable and performing well." He praised the leadership of Public Sector Banks (PSBs) for systematically reducing Non-Performing Assets (NPAs) and noted substantial credit growth across agriculture, MSME and corporate sectors. Referring to global tariff issues and geopolitical conflicts, Nagaraju said India's economy continues to demonstrate strong underlying fundamentals despite external challenges. On technology integration in banking, he acknowledged the benefits of digital infrastructure but cautioned against rising cyber vulnerabilities. "Customer trust is the foundation of banking. Every bank must ensure that customers, particularly small businesses, senior citizens, first-time digital users, and the vulnerable segments are adequately protected," he said. Nagaraju also advocated governance led by senior management to build a strong risk culture and called for empowering Chief Risk Officers (CROs) with adequate independence and resources. He commended the Indian Banks' Association for its role in strengthening the banking sector and noted that risk management has evolved beyond traditional compliance mechanisms. The summit was attended by senior policymakers and banking leaders, including Executive Director of Indian Overseas Bank T. Dhanaraj, Executive Director of Bank of India Rajiv Mishra, Executive Director of Punjab National Bank Amit Kumar Srivastava, and Professor at IIM Bangalore M Jayadev. (ANI)
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