Swaminathan J, Deputy Governor, RBI.
The next phase of banking resilience will be less about addressing known balance sheet stress and more about managing complexity and uncertainty, according to Swaminathan J, Deputy Governor, RBI.“Recent years have shown that shocks can arise from very different sources: pandemics, geopolitical tensions, supply chain disruptions, commodity price volatility, cyber incidents or sudden shifts in market sentiment.“The task, therefore, is not only to prepare banks for known risks, but also to make them adaptable to risks whose timing, form and transmission may be difficult to predict,” Swaminathan said in a speech the School of International and Public Affairs (SIPA), Columbia University.The Deputy Governor noted that retail credit, digital lending and microfinance have expanded access, but they also require careful underwriting, fair recovery practices and close monitoring of borrower leverage. Similarly, technology can make banking faster, but it does not automatically make it wiser.AI, cyber risk, third-party dependencies, climate-related risks and financial interconnectedness will therefore require ongoing attention from banks and supervisors.continuing project“Banking resilience is not a fixed achievement. It is a continuing institutional project. As India’s recent experience has shown, it is built through discipline across the balance sheet and beyond, transparent recognition of stress, balance sheet strengthening, calibrated and adaptive regulation, and responsible conduct within banks,” Swaminathan said.The Deputy Governor observed that strong banks require capital and technology, but they also require judgment, governance, accountability and institutions that learn.“That, perhaps, is the central public policy lesson: resilience is not only about withstanding the last shock, but about building the capacity to respond well to the next one,” he said.He underscored that there are five recent dimensions of resilience by design: transparent recognition of stress, balance sheet strengthening, stronger supervision, calibrated and adaptive regulation, and resilience within banks themselves.Swaminathan highlighted that risk has a habit of building quietly in good times and introducing itself loudly when conditions change.Buffers, governance and risk discipline must be strengthened when growth is strong, asset quality appears comfortable, and risk appetite naturally rises, he added. Resilience must therefore be built before it is tested.Published on June 3, 2026
