The conflict in the Middle East remains a key concern for the Indian economy, while artificial intelligence (AI) and technology are expected to play a major role in the banking sector, RBI Governor Sanjay Malhotra said in an interview with DD News.
Malhotra said the Indian economy remains robust and the RBI's policy framework continues to support growth.
He added that the central bank will continue to "wait and watch" developments in West Asia, while the progress of the monsoon remains an important factor for the agriculture sector.
On the banking system, he said capital adequacy is above 17 per cent, and the liquidity coverage ratio exceeds 120 per cent, reflecting a healthy financial system. He said there are no signs of stress in bank lending despite strong growth in gold loans and credit to MSMEs.
On inflation, Malhotra said price pressures are being driven by supply-side factors and reiterated the RBI's commitment to keeping consumer price inflation within its target range.
He also said the rupee remains relatively stable, supported by measures taken by the RBI and the government, while India's balance of payments is expected to remain strong over the medium term. He added that fiscal and monetary policies remain well coordinated and that AI and technology will play a vital role in the future of banking.