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RBI Deputy Governor M Rajeshwar Rao says that “temptation” of short-term gains can easily see long-term financial security for individuals.
RBI Deputy Governor M Rajeshwar Rao.
Amidst the concerns emanating from an enthusiasm in unsafe borrowings and derivatives, Reserve Bank Deputy Governor M Rajeshwar Rao on Friday asked financial sector institutions to guard against “careless financials”. Speaking at an event at the Stock Exchange NSE, Rao said that “temptation” can easily oversee long -term financial security for individuals.
“We should be aware of the risk of careless financialization,” he said.
Rao said that there is concern over excessive borrowing in the unsafe section and the “derivative enthusiasm” in the capital market.
“It is the duty of financial institutions to ensure that customers fully understand the risks associated with leveraged products and speculative investment,” he said.
Rao said that RBI is working with other financial sector regulators to educate customers, and said that it is the absence of financial literacy due to which people are victims of dishonest players.
However, when there is a shock, it is the investor’s belief in the financial system that disappears and therefore it is necessary for the system to invest in education for his own good.
After assurances to pay attention to the cost of regulation when establishing the rules of Governor Sanjay Malhotra, Rao said that financial regulation is a delicate balance act in a fast book world.
Rao said, “… very little regulation can increase systemic risk, while excessive regulation can prevent innovation, limit credit availability and increase costs.”
He also said that financial inclusion is “superficial” if the accounts opened under the Jan Dhan Yojana are not used, and said that UPI has created a big financial footprint for informal sector which used by lenders to use such people or institutions. Can be done to get. In the mainstream.
RBI’s Integrated Leise Interface has provided 6 lakh loans worth Rs 27,000 crore till 6 December last year, Rao said, 36 lenders are active on the platform which draws data from 50 sources.
Artificial intelligence and machine learning are being used a lot, Rao said that the financial system lacks the root clarity of challenges and has the ability to reduce confidence in the system.
Regular human inspection is required when talking about such applications, saying that there is also a risk of “automation decency”, which employees can use technology input more in their regular jobs.
AI has the ability to increase the number of jobs by mass adoption, Rao said, saying that it is the nature of jobs that will change.
(This story has not been edited by News18 employees and a syndicated news agency has been published from feed – PTI,
