Reserve Bank Of India Governor Shaktikanta Das Addresses Press Conference

Thank you very much for being here at such a short notice. All of you have been very cooperative and I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also sort of share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts.

If you recall, in that December 12th, 2018, what I had said before you, I had made a few points. I had said that it's available on YouTube even now. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, core values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for... my approach, I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team.

I had also said that decision making in the modern world is very complex in today's dynamic world and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting, the framework of flexible inflation targeting is very important and there is always a need to... I had highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words.

So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward.

In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a... the authority was within the Reserve Bank, but we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team, each of my colleagues. They did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers of course. But I think that was the level of dedication we saw.

It was also evident in the quarantine facility which we set up here, I have talked about it earlier, which lasted in fact more than one year, one and a half years or so. And the entire staff and service providers had absolutely no complaint and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today, we put up a message in the X platform today morning, so I don't want to repeat on that.

My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank but I think for the wider economy also, I would like to list out.

First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best.

Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India.

Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI among the central banks is a pioneer. Very few countries have... almost every central bank is dealing with, I mean they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.

Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future and there will be a national level, nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI and they are producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems.

And ULI, about which I just mentioned, it will be transformational. It will, I think, play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And that, I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout.

And finally, I would like to take this opportunity to convey my best wishes to the incoming Governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th Governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. So yes, Deepika.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the Finance Ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank, I'm talking about the six years that I have been here. The coordination between the Finance Ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side because ultimately everybody belongs to the... we are all working for the nation, for the economy. But the relationship between the government, the Finance Ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply-side measures which helped the Reserve Bank to also check inflation. The same level of coordination continues even as I am speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I, so I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility and you have to correlate with the outer world. Perspectives of the Finance Ministry or the central bank can vary, can differ at times, it happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the Finance Ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. I mean, it's a process. I'm not finding fault with that. For example, the economic capital framework, that has been formalized. The inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy.

Okay, what is unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today the day starts here and it ends here, because there is always a next day, tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. So you cannot... in the life of any organization and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you asked is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first demit office, then I will think about it. Let me enjoy a few... there's no specific plan as of now and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside or even within the Reserve Bank, there are always multiple views. And within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. Growth, high growth or slowing growth, are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the Reserve Bank and within the MPC, I think we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Now there are too many questions, but I think we need to wrap up.

Sir, you see, first our endeavor was not to... I should not use the word failure, but crisis or stress in any financial... incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier, the deputy governors also have been talking about it. Today RBI, if I can say with confidence, and I think it is something about which my all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. I had, I think in a monetary policy statement, I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light, but through the process of direct interaction we have been able to resolve the problems. And the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, four microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance and very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out and facilitating quick implementation or quick resolution, corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please. Sorry, MPC? No, no, MPC is an institution, it will continue. I mean, the new members have already participated in two meetings and there is the internal MPC, the Monetary Policy Department of the Reserve Bank which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution, there is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now a particular day in the month is dedicated specifically, earmarked for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am the governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My experience is that I think almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that I think almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply-side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply-side measures, the government-side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis, the outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define. And I would like to say that there is nothing like... it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach.

I think this is now going too much. I think we'll have to call a halt. Punit, you have to take charge. So I think some of the questions we can deal with during the high tea. So if there is any compelling question, please come forward, otherwise we can deal with it sitting towards the end.

The relationship between the regulator, supervisor, and the entity... it is a continuing interaction.

One last question, sir. Shama would like to ask.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Thank you, thank you very much. It has been an absolute pleasure and delight to interact with all of you. Thank you.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative and I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also sort of share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts.

If you recall, in that December 12th, 2018, what I had said before you, I had made a few points. I had said that it's available on YouTube even now. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, core values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for... my approach, I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team.

I had also said that decision making in the modern world is very complex in today's dynamic world and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting, the framework of flexible inflation targeting is very important and there is always a need to... I had highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words.

So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward.

In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a... the authority was within the Reserve Bank, but we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team, each of my colleagues. They did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers of course. But I think that was the level of dedication we saw.

It was also evident in the quarantine facility which we set up here, I have talked about it earlier, which lasted in fact more than one year, one and a half years or so. And the entire staff and service providers had absolutely no complaint and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today, we put up a message in the X platform today morning, so I don't want to repeat on that.

My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank but I think for the wider economy also, I would like to list out.

First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best.

Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India.

Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI among the central banks is a pioneer. Very few countries have... almost every central bank is dealing with, I mean they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.

Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future and there will be a national level, nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI and they are producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems.

And ULI, about which I just mentioned, it will be transformational. It will, I think, play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And that, I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout.

And finally, I would like to take this opportunity to convey my best wishes to the incoming Governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th Governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. So yes, Deepika.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the Finance Ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank, I'm talking about the six years that I have been here. The coordination between the Finance Ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side because ultimately everybody belongs to the... we are all working for the nation, for the economy. But the relationship between the government, the Finance Ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply-side measures which helped the Reserve Bank to also check inflation. The same level of coordination continues even as I am speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I, so I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility and you have to correlate with the outer world. Perspectives of the Finance Ministry or the central bank can vary, can differ at times, it happens world over. But in my tenure, I think we have been able to resolve all such issues through internal discussions.

You have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution. There is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now, a particular day in the month is dedicated specifically for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, or when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My sense is that almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things. Yes, there... I think this is going too far. I think I'll take another three, four questions and we must conclude.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply side measures, the government side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis. The outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define... and I would like to say that there is nothing like... you know, it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach. I think this is now going too much. I think we'll have to call a halt. Punyaji, you take charge. So I think some of the questions we can deal with it during the high tea. So if there is any compelling question, you please come forward. Otherwise, we can deal with it from Mr. Brij sitting towards the end.

Brij, thank you, sir.

Strictly between the regulator, supervisor, and the entity. The process of interaction, it is a continuing interaction.

Yes.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative. And I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all, and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts. If you recall, in that December 12th, 2018, what I had said before you, I had made about a few points. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for that money approach. I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team. I had also said that decision making in the modern world is very complex in today's dynamic world, and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting framework is very important, and there is always a need to... I highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words. So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward. In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleagues did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically, they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers, of course. But I think that was the level of dedication we saw. It was also evident in the quarantine facility which we set up here, which lasted more than one year, one and a half years or so. And the entire staff and service provider had absolutely no complaint, and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today. We put up a message in the X platform today morning, so I don't want to repeat on that. My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity, and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank, but I think for the wider economy also, I would like to list out. First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best. Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India. Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come, and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI, among the central banks, is a pioneer. The very few countries which have... almost every central bank is dealing with, I mean, they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency. Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future, and there will be a nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI, and they're producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems. And ULI, which I just mentioned, it will be transformational. It will play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout. And finally, I would like to take this opportunity to convey my best wishes to the incoming governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. Yes, Deepika, please.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the finance ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank. I'm talking about the six years that I have been here. The coordination between the finance ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side, because ultimately we are all working for the nation, for the economy. But the relationship between the government, the finance ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply side measures which helped the Reserve Bank to check inflation. The same level of coordination continues even as I'm speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I. So I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility, and you have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. And I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a teamwork. Which... issues, and we internally have been discussing about this issue which you are saying. 193, 90th year of Reserve Bank. Landmark decisions, constantly dynamic world. I think we have to put a fin... yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution. There is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now, a particular day in the month is dedicated specifically for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, or when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My sense is that almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things. Yes, there... I think this is going too far. I think I'll take another three, four questions and we must conclude.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply side measures, the government side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis. The outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define... and I would like to say that there is nothing like... you know, it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach. I think this is now going too much. I think we'll have to call a halt. Punyaji, you take charge. So I think some of the questions we can deal with it during the high tea. So if there is any compelling question, you please come forward. Otherwise, we can deal with it from Mr. Brij sitting towards the end.

Brij, thank you, sir.

Strictly between the regulator, supervisor, and the entity. The process of interaction, it is a continuing interaction.

Yes.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative. And I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all, and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts. If you recall, in that December 12th, 2018, what I had said before you, I had made about a few points. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for that money approach. I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team. I had also said that decision making in the modern world is very complex in today's dynamic world, and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting framework is very important, and there is always a need to... I highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words. So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward. In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleagues did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically, they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers, of course. But I think that was the level of dedication we saw. It was also evident in the quarantine facility which we set up here, which lasted more than one year, one and a half years or so. And the entire staff and service provider had absolutely no complaint, and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today. We put up a message in the X platform today morning, so I don't want to repeat on that. My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity, and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank, but I think for the wider economy also, I would like to list out. First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best. Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India. Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come, and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI, among the central banks, is a pioneer. The very few countries which have... almost every central bank is dealing with, I mean, they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency. Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future, and there will be a nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI, and they're producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems. And ULI, which I just mentioned, it will be transformational. It will play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout. And finally, I would like to take this opportunity to convey my best wishes to the incoming governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. Yes, Deepika, please.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the finance ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank. I'm talking about the six years that I have been here. The coordination between the finance ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side, because ultimately we are all working for the nation, for the economy. But the relationship between the government, the finance ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply side measures which helped the Reserve Bank to check inflation. The same level of coordination continues even as I'm speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I. So I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility, and you have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. And I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a teamwork. Which... issues, and we internally have been discussing about this issue which you are saying. 193, 90th year of Reserve Bank. Landmark decisions, constantly dynamic world. I think we have to put a fin... yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution. There is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now, a particular day in the month is dedicated specifically for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, or when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My sense is that almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things. Yes, there... I think this is going too far. I think I'll take another three, four questions and we must conclude.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply side measures, the government side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis. The outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define... and I would like to say that there is nothing like... you know, it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach. I think this is now going too much. I think we'll have to call a halt. Punyaji, you take charge. So I think some of the questions we can deal with it during the high tea. So if there is any compelling question, you please come forward. Otherwise, we can deal with it from Mr. Brij sitting towards the end.

Brij, thank you, sir.

Strictly between the regulator, supervisor, and the entity. The process of interaction, it is a continuing interaction.

Yes.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative. And I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all, and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts. If you recall, in that December 12th, 2018, what I had said before you, I had made about a few points. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for that money approach. I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team. I had also said that decision making in the modern world is very complex in today's dynamic world, and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting framework is very important, and there is always a need to... I highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words. So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward. In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleagues did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically, they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers, of course. But I think that was the level of dedication we saw. It was also evident in the quarantine facility which we set up here, which lasted more than one year, one and a half years or so. And the entire staff and service provider had absolutely no complaint, and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today. We put up a message in the X platform today morning, so I don't want to repeat on that. My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity, and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank, but I think for the wider economy also, I would like to list out. First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best. Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India. Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come, and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI, among the central banks, is a pioneer. The very few countries which have... almost every central bank is dealing with, I mean, they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency. Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future, and there will be a nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI, and they're producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems. And ULI, which I just mentioned, it will be transformational. It will play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout. And finally, I would like to take this opportunity to convey my best wishes to the incoming governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. Yes, Deepika, please.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the finance ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank. I'm talking about the six years that I have been here. The coordination between the finance ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side, because ultimately we are all working for the nation, for the economy. But the relationship between the government, the finance ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply side measures which helped the Reserve Bank to check inflation. The same level of coordination continues even as I'm speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I. So I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility, and you have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. And I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a teamwork. Which... issues, and we internally have been discussing about this issue which you are saying. 193, 90th year of Reserve Bank. Landmark decisions, constantly dynamic world. I think we have to put a fin... yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution. There is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now, a particular day in the month is dedicated specifically for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, or when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My sense is that almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things. Yes, there... I think this is going too far. I think I'll take another three, four questions and we must conclude.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply side measures, the government side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis. The outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define... and I would like to say that there is nothing like... you know, it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach. I think this is now going too much. I think we'll have to call a halt. Punyaji, you take charge. So I think some of the questions we can deal with it during the high tea. So if there is any compelling question, you please come forward. Otherwise, we can deal with it from Mr. Brij sitting towards the end.

Brij, thank you, sir.

Strictly between the regulator, supervisor, and the entity. The process of interaction, it is a continuing interaction.

Yes.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative. And I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all, and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts. If you recall, in that December 12th, 2018, what I had said before you, I had made about a few points. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for that money approach. I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team. I had also said that decision making in the modern world is very complex in today's dynamic world, and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting framework is very important, and there is always a need to... I highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words. So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward. In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleagues did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically, they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers, of course. But I think that was the level of dedication we saw. It was also evident in the quarantine facility which we set up here, which lasted more than one year, one and a half years or so. And the entire staff and service provider had absolutely no complaint, and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today. We put up a message in the X platform today morning, so I don't want to repeat on that. My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity, and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank, but I think for the wider economy also, I would like to list out. First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best. Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India. Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come, and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI, among the central banks, is a pioneer. The very few countries which have... almost every central bank is dealing with, I mean, they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency. Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future, and there will be a nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI, and they're producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems. And ULI, which I just mentioned, it will be transformational. It will play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout. And finally, I would like to take this opportunity to convey my best wishes to the incoming governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. Yes, Deepika, please.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the finance ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank. I'm talking about the six years that I have been here. The coordination between the finance ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side, because ultimately we are all working for the nation, for the economy. But the relationship between the government, the finance ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply side measures which helped the Reserve Bank to check inflation. The same level of coordination continues even as I'm speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I. So I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility, and you have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. And I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a teamwork. Which... issues, and we internally have been discussing about this issue which you are saying. 193, 90th year of Reserve Bank. Landmark decisions, constantly dynamic world. I think we have to put a fin... yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.

It's a continuing institution. There is always room for improvement. That will be my answer to the second question. And the first question you said was fintech. Well, I would beg to differ. In fact, in one of the monetary policy statements or in one of my speeches, I have talked about how many meetings we have held with the fintech companies, either in groups or individually. Now, a particular day in the month is dedicated specifically for fintech companies and innovators to come to RBI and have face-to-face interaction. There is a separate fintech department. And in fact, the feedback that I have got, not because I am governor and they tell me, because in private when people come to meet me, either in a small group or individually, one company, or when they come and meet me, I always encourage them in those meetings to be absolutely and brutally frank and to share their concerns. My sense is that almost all of them are very satisfied with RBI. Those who had some concerns or those who thought RBI was acting very tough, when they interact with us and when we explain to them the background of our action or the background of our stance, my experience and our experience in the RBI is that almost all of them appreciate why the RBI is doing certain things. And we have tried to improve our communication also to explain the rationale as to why we are doing certain things. Yes, there... I think this is going too far. I think I'll take another three, four questions and we must conclude.

You see, flexible inflation targeting framework is embedded in the law. It's there in the Reserve Bank of India Act. So, and different approaches to monetary... to inflation control, supply side measures, government has been taking. We have been interacting with the government. From the monetary policy side, whatever action is required, the Reserve Bank has been taking. Ultimately, the result will be an outcome of the supply side measures, the government side measures, as well as the monetary policy measures, the monetary measures taken by the Reserve Bank. So it is a synthesis. The outcome is a synthesis of both. Beyond that, approach will depend on the prevalent situation and the outlook. You cannot really define... and I would like to say that there is nothing like... you know, it's media or the analysts, they term certain things as hawkish, dovish, and all that. You know, names of various birds are used. In fact, I think my predecessor had used the word saying that the Reserve Bank, the MPC keeps its eyes always open. But I think these are nice ways of describing. As far as I understand, I think the effort of all central banks, and very much in the Reserve Bank, is to take the most appropriate measure in the interest of the economy. So that is the overarching approach. I think this is now going too much. I think we'll have to call a halt. Punyaji, you take charge. So I think some of the questions we can deal with it during the high tea. So if there is any compelling question, you please come forward. Otherwise, we can deal with it from Mr. Brij sitting towards the end.

Brij, thank you, sir.

Strictly between the regulator, supervisor, and the entity. The process of interaction, it is a continuing interaction.

Yes.

I think the Indian economy today is resilient and robust, with the capacity to deal with global spillovers very effectively. We are much better placed today than what it was a few years ago. We are much better placed to deal with all such challenges. And the inherent potential of the Indian economy to grow is very much there. And I always remain optimistic about the outlook for the Indian economy. And precisely for that reason, the last monetary policy statement, I again quoted Netaji Subhas Chandra Bose, which I had done earlier: 'Never lose faith in the destiny of India.' Thank you very much.

Yeah, thank you, sir. Thank you very much for being here at such a short notice. And all of you have been very cooperative. And I think you have been widely reporting on the Reserve Bank and its activities over the last six years. So a special thank you once again to you all, and thank you to the wider audience for having been so patient and watching some of my... I presume you have been watching the press conferences of the Reserve Bank. I don't propose to make a statement or anything, but I thought it appropriate that I recall the day I joined the Reserve Bank of India on 12th of December 2018 at 4:00 p.m. or so, that they had held a press conference. So I thought it would be appropriate and fitness of things that when I'm demitting office later today, I also share some thoughts with you. So I'm not presenting a report card, I'm not making any statement, but just sharing a few thoughts. If you recall, in that December 12th, 2018, what I had said before you, I had made about a few points. I had said that the Reserve Bank is a great institution with a rich legacy. I had also said that I will do everything to uphold the professionalism, values, credibility, and autonomy of the Reserve Bank. I also said that the officials and the personnel of the Reserve Bank, they have a high level of knowledge, quality of knowledge, core competence, and professionalism. I had mentioned about the teamwork, the need for that money approach. I'm not saying it was not there earlier, but I had said clearly that my approach would be to work in a spirit of teamwork within the Reserve Bank of India and take everybody along and work as a team. I had also said that decision making in the modern world is very complex in today's dynamic world, and therefore a consultative approach is necessary. A consultative approach adds value and depth to the decisions themselves. I had mentioned about the challenges in the banking sector. I had also mentioned that there are certain... and this I'm saying in 2018, I had mentioned about the challenges that time before us with regard to the banking sector. I had also talked about the liquidity issue which needs to be addressed. And finally, I had said that the flexible inflation targeting framework is very important, and there is always a need to... I highlighted and stressed the importance of maintaining inflation while being mindful of the growth trajectory. These were the exact words. So in the last six years, it has been my endeavor to adhere to these principles which I had mentioned when I took over as the RBI Governor. You would be aware that we have adopted a very... we have been holding wide-ranging consultations on many issues. In fact, the consultative approach behind regulation, behind all decisions that we have taken in the last six years, the consultative approach is very much evident. In many cases, we hold face-to-face direct meetings with the stakeholders or their associations. In many cases, we release a discussion paper or a draft circular, get the comments of all the stakeholders, and then move forward. In fact, the same approach was followed with regard to the Regulation Review Authority, the RRA 2.0, where we formed a group of experts to advise the Regulation Review Authority within the RBI. So we have followed the consultative approach. And the teamwork in the Reserve Bank was perhaps, in my experience, I can say, I cannot talk about earlier days, it was perhaps at a very high level. I got excellent cooperation from each and every member of the RBI team. Each of my colleagues did their best during the trying times of COVID, even at the risk of their own safety, their personal health. Whenever required, physically, they all came for discussions. Only I and the deputy governors, we were coming regularly, and a few senior officers, of course. But I think that was the level of dedication we saw. It was also evident in the quarantine facility which we set up here, which lasted more than one year, one and a half years or so. And the entire staff and service provider had absolutely no complaint, and they were very happy to remain there and do their jobs while the families were away at home. Now that is the level of commitment and the teamwork I saw in the Reserve Bank. So I would like to take this opportunity to convey my thanks to all my colleagues in the Reserve Bank. I would also like to place on record the excellent suggestions, the valuable inputs which we have received in our interactions with various stakeholders. I have already tweeted about it, or X-ed as you call it today. We put up a message in the X platform today morning, so I don't want to repeat on that. My personal journey, it's not a personal journey, it's an official journey of a governor of the Reserve Bank. I was fortunate to get this opportunity, and I have tried to give my best to the institution, to its policies, in the best interest of the economy. Now, what lies ahead? The key issues in the life of a central bank or any institution or organization, it's always a continuing institution. You deal with challenges, but there are always new challenges. There are jobs which you have undertaken, there are tasks which you have done. Some of it is completed, some of it would be midway, they will be taken forward. So some important issues ahead of us, not only for the Reserve Bank, but I think for the wider economy also, I would like to list out. First, so far as the Reserve Bank is concerned, I think restoring the inflation-growth balance is the most important task ahead of the Reserve Bank. And I'm sure the team RBI under the leadership of the new governor will take it forward. Second, there's a changing world order. I have talked about it in my last monetary policy statement. The entire global geopolitical dynamics, the geoeconomic dynamics, that is undergoing fast change. The world order is also changing. In this situation, it's always necessary to remain alert and agile. And I'm sure the RBI will certainly be at its best. Third, cyber security and its associated risks and threats. I think that is a big challenge for every authority, not only in India but 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 this issue of cyber security and dealing with cyber threats and challenges. That is a continuing task because the challenges are continuing, new challenges are emanating, and that will be a continuing challenge for every central bank in the world, including the Reserve Bank of India. Fifth, our focus in the last six years has been to capitalize as much as possible on harnessing the benefits of new technology. We set up the RBI Innovation Hub in Bengaluru. We have a continuing regulatory sandbox where many innovative ideas and thoughts have come, and we have always tried to take them forward. We have given our approval to many of the innovative ideas and thoughts and the projects which came in the regulatory sandbox. CBDC is again another area where RBI, among the central banks, is a pioneer. The very few countries which have... almost every central bank is dealing with, I mean, they're talking about or they're experimenting or they're discussing about CBDC, but actual launching of a pilot project has been done by very few. And as I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency. Similarly, the Unified Lending Interface, ULI, it is a true game changer. And I'm sure its benefits will get harnessed fully in the near future, and there will be a nationwide rollout. And finally, sixth, financial inclusion. We have given a lot of attention. It's again a continuing responsibility, it's a continuing task. You cannot reach a stage of finality in that. The tasks and the works will have to continue. Under UPI, we have launched many new innovative products under the overarching umbrella of the UPI, and they're producing excellent results. The UPI today has emerged as a global pioneer and as a global leader in payment systems. And ULI, which I just mentioned, it will be transformational. It will play a very transformational role in credit delivery to the bottom of the pyramid. The ease of access, the speed, and the simplicity of procedure are the unique characteristics of ULI. And I would, sitting outside, I would look forward for a nationwide rollout. And I have absolutely no doubt in my mind that the Reserve Bank, with the cooperation of all central government departments and agencies, with the cooperation of the state governments, will do a nationwide rollout. And finally, I would like to take this opportunity to convey my best wishes to the incoming governor, Shri Sanjay Malhotra, a person with wide-ranging, a very wide experience. And I'm sure he will do his best. And from my side, all my best wishes to my successor for success as the 26th governor of the Reserve Bank. So I'll stop here. Thank you very much. And we'll take a few questions. I don't want to make it a full-fledged press conference. And after that, we will adjourn for the high tea. Yes, Deepika, please.

I would like to mention that I have tweeted about it today morning also. I think the coordination between the finance ministry and the Reserve Bank of India, I can't talk about the period prior to my coming to the Reserve Bank. I'm talking about the six years that I have been here. The coordination between the finance ministry, the government on one side, and the Reserve Bank, I should not say one side and the other side, because ultimately we are all working for the nation, for the economy. But the relationship between the government, the finance ministry in particular, and the Reserve Bank of India, I think they have been at their best. We had excellent cooperation, excellent coordination before COVID, during COVID, after COVID. The multiple challenges which we faced when the inflation spiked following the commencement of the war in Ukraine, the government undertook a lot of supply side measures which helped the Reserve Bank to check inflation. The same level of coordination continues even as I'm speaking to you. Thank you.

No, first thing is I cannot give any mantra to anyone. And what advice I will give to Sanjay Malhotra, should he ask me, and I'm sure there will be opportunity for interaction between Sanjay and me, but what advice I would give him should he ask, I think you leave it to... that is something between him and I. So I don't want to talk about it. And the first part of the question is, you know, people have their way of looking at things from outside. It's nothing unusual. But when you take a responsibility, any responsibility for that matter, one is what is expected of that responsibility. The equally important aspect is how do you see the impact of your responsibility, and you have to correlate with the outer world. Perspectives of the finance ministry or the central bank can vary, can differ at times. It happens world over. But in my tenure, I think 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 looks at things, yes, definitely from the Reserve Bank's perspective and from the point of view of what is the mandate given to the Reserve Bank and how he is going to fulfill that mandate. But while fulfilling that mandate, I can say with confidence and certainty, in the past, present, if I can say till today evening, and in the future, the governors keep in mind the requirement of the wider economy also. So it is your responsibility, it is your mandate given to you because you are occupying a particular position, plus the requirements of the wider economy. I think it's a synthesis of both and eventually it's a judgment call which every governor takes. Thank you.

Yes.

Definitely, certainly. The consultative approach to regulation, the FIT framework, and I think the Bimal Jalan committee, which was actually jointly set up by the government, you know, the selection of members was jointly done by the government, the finance ministry, and the Reserve Bank. It was constituted immediately after I took over in the Reserve Bank. I think many things have got institutionalized. And as the economy grows, the economy is also getting formalized. A lot of informal sector activities today, and rightly so, are getting formalized. Similarly, institution building and aspects of institutions which were perhaps not formalized, they have got formalized. It's a process. I'm not finding fault with that. I think, for example, the economic capital framework that has been formalized, the inflation targeting framework has also been formalized by an amendment to the law. So I think formalization of aspects of an institution is adding strength to our economy. I don't... yeah.

Okay, what is the unfinished task? I mentioned about it. In the life of any institution, there will always be unfinished tasks. It's not like today starts here and it ends here, because there is always a next day. Tomorrow is another day, there's a next morning, there's a new sunrise. So it's a continuing process. You cannot... in the life of any organization, and including a central bank, there will always be things. I don't call them as unfinished tasks, but I always... because unfinished means as if everything has to be done within a limited period of time. But I think I would like to call them as works in progress. In any institution, there are always works in progress. And the second question you ask is... okay, I think that question let's leave it for my memoirs, should I ever write one.

I think let me first, you know, demit office, then I will think about it. Let me enjoy a few... you know, there's no specific plan as of now, and I'll think about it. I mean, I'll think about it.

Well, rating is for you to do, and I can't reply. But on the first question, I am constrained by the fact that we are still in the silent period after the monetary policy, you know, that was on the 6th. Even if I demit office, I'm still bound by the silent period because that is embedded in the law, in the regulations. So I cannot comment on that much. But having said that, I will just like to mention a couple of sentences. People are entitled to their views outside, or I mean, even within the Reserve Bank there are always multiple views, and within the MPC also there are differing views, which is quite normal. So everybody is entitled to their views. But as I look at it, I think growth is impacted by multiplicity of factors, not just one factor of the repo rate. High growth or slowing growth are impacted by multiplicity of factors. I think somebody mentioned that it should not be looked at very simplistically. And monetary policy, our effort has been to follow and make the monetary policy as appropriate as possible, keeping in mind the prevailing conditions and more importantly the overall outlook, what lies ahead. Beyond that, assessment of our monetary policy is for others to make. But I think within the MPC and within the Reserve Bank, we are convinced that what we have done was the best option available and was the best under these circumstances. Beyond that, I cannot and I should not, because I am bound by the silent period of the monetary policy framework requirements.

Okay, please.

No, sir, not with you, certainly. Sir, my question is on the banking side. You're possibly one of the few RBI governors to see a lot of bank failures in your tenure. When you came in, we had the IL&FS crisis at its peak. People were calling it India's Lehman moment and things like that. You thankfully ensured by keeping liquidity high, etc., that it's not India's Lehman moment. We also had Yes Bank crisis, there was PMC, Lakshmi Vilas Bank, and so on. Each of these banks, you've come up with a new solution to take care of the problem. None of the two are similar. But if in 2024 we are to look back and see if any of this could have been tackled differently, what would it be for you? Or even in the larger scheme of things, if you were given a moment to tackle or look at things in a different way, come up with a different solution, would you want to touch upon any of it, sir?

You see, first, our endeavor was not to... not to sort of... failure of... in fact, I should say, I should not use the word failure, but crisis or stress in any finance... Incidentally, IL&FS had happened a few months before I joined the Reserve Bank. But the challenges in the various banking and non-banking institutions which you mentioned, our effort was always to see that public money, taxpayers' money is not burdened. Public sector banks are not asked to, you know, sort of merge an institution with a public sector bank. We did follow that approach in the case of the Yes Bank, but the contribution made by the banks led by the State Bank of India was limited, and it was a kind of a bank-led resolution. So we tried to deal with each situation. You cannot have a standard template of dealing with such stress situations because the problems in every incidence of bank stress or NBFC stress, the problems vary. So each issue, each entity, you have to deal with it differently depending on the circumstances prevailing there. But every such challenge that we have faced is also a learning experience. And what we learned from that and what we have done is to deepen our supervision. I think the supervision vertical of the Reserve Bank, the supervisory methods and systems of the Reserve Bank have been really, really improved. And I have talked about it at length earlier. The deputy governors also have been talking about it. Today, RBI, if I can say with confidence, and I think it is something about which all my colleagues and I, we feel very happy about and draw a lot of satisfaction. I think today RBI supervision is much sharper than what it was earlier. Our effort is always to identify a potential problem, not allow it to become bigger, and to deal with it, to nip it in the bud, to deal with it in advance in a proactive manner. And I think in a policy statement I had used the phrase saying that we do not wait for the house to catch fire. So I think that is the lesson which we have learned from these experiences. Yes, please.

It's always a teamwork. Which... issues, and we internally have been discussing about this issue which you are saying. 193, 90th year of Reserve Bank. Landmark decisions, constantly dynamic world. I think we have to put a fin... yes, please.

It's always a collective decision within the Reserve Bank. And in the last monetary policy MPC meeting statement also, in the MPC statement, I have talked about the same thing. Putting business restrictions is always the last resort. We always try to avoid such a situation. We engage with the individual banks or NBFCs for months together. In fact, in one or two cases, it goes even beyond one year. And there are quite a few, not many, but there are quite a few institutions which have not come to the public light. But through the process of direct interaction, we have been able to resolve the problems, and the concerned institutions, they responded very quickly. We don't like to unnecessarily prolong those restrictions. Recently, for microfinance lenders, we put restrictions and we have withdrawn the restriction in one of them in less than two months. That's because we saw immediate compliance, very quick steps were taken. So therefore, we don't like to unnecessarily prolong it. We adopt this restriction as a last resort after months of engagement when we don't see the desired results. It's the last resort, and our effort is to, even after putting the restriction, our focus is on directly continuing the interaction with the institution, helping them out, and facilitating quick implementation or quick corrective steps. And as soon as we see the compliances are visible or almost completed, we remove the restrictions. Yes, please.

No, no, MPC is an institution. It will continue. I mean, the new members have already participated in two meetings. And there is the internal MPC, the Monetary Policy Department of the Reserve Bank, which does all the research and makes presentations. So I don't think it should be an issue at all.