Restoring inflation-growth balance most important task ahead of RBI: Shaktikanta Das

The country’s gross domestic product (GDP) slowed to a seven-quarter low of 5.4 per cent in the second quarter of FY25, while Consumer price-based inflation (CPI), or retail inflation, surged to a 14-month high of 6.21 per cent in October 2024. Das noted that with a changing world order, the entire geopolitical and geo-economic dynamics is undergoing fast-change. “In these situations, it is always necessary to remain alert and agile and I am sure the RBI will certainly be at its best,” he said.

The Governor said that cyber security threats and the associated risks pose a big challenge for every authority, not only in India but for all over the world, and particularly for a central bank. “In the last six years and even earlier, also, we have given a lot of attention to the issue of cyber security, and (are) dealing with cyber challenges and threats. New challenges (related to cyber security) are emanating and these will be a continuing task for every central bank in the world, including the RBI,” he said.

Das further said that the RBI’s focus in the last six years has been to capitalize as much as possible on harnessing the benefits of the new technology. He highlighted some of the initiatives such as setting up of RBI Innovation Hub (RBIH) in Bengaluru and regulatory sandbox where many innovative ideas and thoughts are being encouraged and are approved.

Talking about the central bank digital currency (CBDC), or e-rupee, Das stated that the RBI has been a pioneer in the domain of digital currency. Referring to CBDC as the “future of currency”, Das said it has a huge potential in the days to come. He said Unified Lending Interface (ULI) will be a game changer and hoped that it will soon be launched on a nationwide basis.

The Governor said the RBI has given a lot of focus on financial inclusion but it is a continuing task. To a question on the relationship between the government and the RBI as he completes his six-year tenure, Das said there has been excellent cooperation and coordination between the two. “The relationship between the finance ministry and the RBI has been at its best,” he emphasised.

The Governor said that the government and the RBI have worked closely to deal with multiple challenges such as during COVID and war in Ukraine which led to a spike in inflation. When asked about his views on the market’s perception that when a governor comes from the finance ministry, he acts as per the government, Das said RBI governors keep in mind the requirements of the wider economy.

“Perspectives of the finance ministry and the central bank can vary at times. It happens world over. In my tenure, we have been able to resolve all such issues through internal discussions. I would like to state emphatically that when a governor comes, he looks at the wider economy,” he said.