Cryptocurrencies are a clear danger: RBI Governor
New Delhi, Jun 30: Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday asserted that cryptocurrencies are a clear danger, and said that anything that derives value based on make-believe, without any underlying, is just speculation.
"A noteworthy feature of current situation is overall resilience of Indian financial institutions, which should stand economy in good stead as it strengthens its prospects. This reflects a combination of good governance and risk management practices..," Das said.
"Even so, we must be mindful of the emerging risks on the horizon. Cryptocurrencies are a clear danger. Anything that derives value based on make-believe, without any underlying, is just speculation under a sophisticated name," he added.
"While technology has supported reach of the financial sector & its benefits must be fully harnessed, its potential to disrupt financial stability has to be guarded against. As financial system gets increasingly digitalised, cyber risks are growing and need special attention," he added.
The RBI's 25th Financial Stability Report (FSR) said banks , as well as non-banking financial institutions, have sufficient capital buffers to withstand shocks.
"Notwithstanding the challenges from global spillovers, the Indian economy remains on the path of recovery, though inflationary pressures, external spillovers and geopolitical risks warrant careful handling and close monitoring," the report said.
The report observed that the outlook for the global economy is shrouded by considerable uncertainty because of the war in Europe, front-loaded monetary policy normalisation by central banks in response to persistently high inflation and multiple waves of the coronavirus pandemic.
Regarding the banking sector, it said the Capital to Risk weighted Assets Ratio (CRAR) of Scheduled Commercial Banks (SCBs) rose to a new high of 16.7 per cent while their Gross Non Performing Assets (GNPA) ratio fell to a six-year low of 5.9 per cent in March 2022.
Macro stress tests for credit risk reveal that SCBs would be able to comply with the minimum capital requirements even under severe stress scenarios, it added.