Reserve Bank of India Deputy Governor Swaminathan J urged financial institutions to build safeguards and fair treatment into expansion plans, warning that outsourcing does not move accountability away from regulated lenders.
He spoke at the FE Modern BFSI Summit in Mumbai on Oct. 15, and the RBI published the speech on Oct. 21. His remarks addressed institutions as they grow and adopt technology, with customer confidence presented as part of lasting growth.
Swaminathan said that assigning loan sourcing, product distribution or model-assisted decisions to outside providers does not remove the responsibility held by the licensed institution. The institution remains answerable for how those activities are handled, even when another party performs the work.
He also called for firms to examine what risk a safeguard covers before they change or automate a process. If a manual step is removed, he said, the institution should ensure that another control addresses the risk it managed. Technology can lower costs, improve customer experience and widen access, but those gains do not eliminate the need to track risks.
He said institutions should consider whether gains are legitimate and fairly achieved, not just how large they are. In his view, safeguards and conduct help determine whether customers continue to trust an institution as it expands.
The RBI’s June 2026 Financial Stability Report provides a banking-sector baseline from end-March. Scheduled commercial banks’ gross nonperforming asset ratio was 1.8%, a multi-decadal low. Banks also reported a capital-to-risk-weighted assets ratio of 17.7%, alongside a 15.3% common equity Tier 1 ratio. The report described banks’ capital and liquidity buffers as strong.
Swaminathan said resilience also rests on how well institutions identify trouble, choose a response and restore operations. Referring to the 2023 U.S. banking stress, he cited US$42 billion in deposits moving in one day; the speech did not name a specific bank.
He warned that a loss of trust can prompt customers to leave and expose institutions to litigation, regulatory penalties and reputational damage. A control breakdown at one firm, he said, may also unsettle confidence across the financial sector.
