RBI governor meets bank CEOs to discuss AI, geopolitics and ECL guidelines

Mumbai: Geopolitical complexities, the rise of artificial intelligence, and new expected credit loss (ECL) guidelines were among the issues discussed when central bank governor Sanjay Malhotra met bank chief executives Tuesday, banking industry executives aware of the talks told ET. Some banks also gave the governor their estimates of inflows from the FCNR (B) scheme, they said."The governor discussed the increasing challenges India and the world would face due to geopolitical volatilities and the impact it will have on energy prices," said a person familiar with the deliberations. "Customer service was also among the points of discussion. FCNR (B) was not the focus of the talks, although some banks gave the governor an idea of the inflows they expect through this route." ET could not ascertain the estimates bank CEOs shared with the Reserve Bank of India (RBI) governor.Oil prices have spiked over 9% after the US reimposed a naval blockade on Iran and launched fresh military strikes. Brent crude futures have risen to $83.30 per barrel amid the latest escalation increasing the risk of higher energy prices for oil importing countries like India.“Besides the current geopolitical scenario, the other points in the meeting were cyber security, forex retail and digital currency which the RBI wants to promote. Bankers did not have many points to make on the FCNR (B) flows since most of the points have been clarified in the FAQs. The governor mentioned that he had nothing to add on the FCNR (B) since the finance minister has already spoken to banks to enhance outreach for greater mobilisation of foreign currency deposits,” a second person said. Earlier expectations from banks point to inflows of between $30 billion to $50 billion through FCNR (B) and ECB borrowings until the special window closes at the end of September. However, volatile global markets and high price demanded by foreign banks abroad has led to a slow start to these inflows. “One deputy governor said that banks have to work harder to market these deposits if the targets have to be achieved as a higher interest rate alone will not be enough,” said a third person aware of the discussions. RBI deputy governors Swaminathan J, Poonam Gupta, S C Murmu and Rohit Jain, and executive directors in charge of supervision, regulation, enforcement, consumer education and protection, and financial inclusion were also present in the meeting, the RBI said in a statement