Reserve Bank of India (RBI) Deputy Governor Swaminathan J said on 15 October 2026 that banks and other lenders should judge growth by the strength of their controls and the trust behind it, not only by its pace. He was delivering a special address at the FE Modern BFSI Summit 2026 in Mumbai. BFSI stands for banking, financial services and insurance.
What happened
The speech was built around the summit theme, “The Next Balance Sheet: Growth. Trust. Resilience.” He described the sector as starting its next phase on firm footing, with better-quality loans and comfortable capital levels. The task, he said, is to hold on to those gains as the system grows, leans more on technology and becomes more interconnected.
He made three propositions.
1. Controls must evolve with the process
Digital onboarding, AI-led underwriting (using algorithms to assess borrowers) and automated workflows can cut costs and reach customers who were hard to serve. But he said not every friction is waste. Independent verification, a maker-checker arrangement (one person prepares, another approves) or a cooling-off period can lower the chance of error, fraud or adverse selection, meaning lending to riskier customers without knowing it.
Before a step is removed, he said, an institution should ask what risk it was controlling and where that control now sits. If the answer is unclear, simplification may be “control dilution”.
He also said that when a loan is sourced through a fintech or a decision relies on a third-party model, responsibility tied to the licence stays with the regulated entity.
2. Trust is an asset that needs continuous investment
Trust does not appear on the balance sheet, he said, but when it is damaged the effects show up quickly as customer attrition, litigation, regulatory penalties and reputational harm. He pointed to three areas where it is tested:
- Selling products: poor incentive design can push staff to close a sale rather than check whether it suits the customer.
- Customer data: the question is not just whether consent was taken, but whether the use matches what the customer would reasonably expect.
- Grievances: complaints can be a source of risk intelligence, since patterns may reveal flaws in products, incentives, digital journeys or third-party arrangements.
He added that a fraud victim may not distinguish between the institution where fraud began, the one the money moved through and the one that hosted a mule account (an account used to pass on stolen money). Weak controls in one place can therefore cost the whole system trust.
3. Resilience is also measured in time
Capital, liquidity and provisioning remain fundamental, he said, but institutions must also be judged on how fast they detect a problem, understand it, decide and restore critical services. He cited the 2023 banking stress in the United States, where US$42 billion of deposits moved in a single day.
He suggested one gauge of governance quality: how long bad news takes to travel through an institution. Risk, compliance and audit teams need enough standing, and boards should actively seek out emerging concerns.
What it means for you
The speech is not a new rule or circular, so nothing changes for customers immediately. It does show what RBI supervisors say they look for: clear accountability when a fintech or other partner is involved, fair selling, careful use of personal data and prompt handling of complaints.
If you borrow through an app or buy a product through an online platform, the regulated bank or lender behind it remains the entity answerable under its licence. If you face a problem, a complaint is meant to be treated as useful information, not just a ticket to close.
Background
The address came during the festive season, which he noted was once called the “busy season” for credit policy, a time when households and businesses make big spending and investment decisions. He closed by linking the idea to the Diwali tradition of opening new account books with the words ‘Shubh Labh’, stressing that the quality and legitimacy of gain matter as much as the gain itself. SEBI Chairman Tuhin Kanta Pandey was among those he addressed; see our explainer on what SEBI is.
For other recent central bank coverage, see RBI rules out near-term rate cut after 25 bps hike.
