The Reserve Bank of India (RBI) announced on Wednesday that it does not see any major concern over allegations that banks are resorting to ‘window dressing’. The central bank said its supervisory mechanism is robust enough to detect and address any violations.
Governor Sanjay Malhotra explained that ‘window dressing’ refers to a lender sprucing up numbers on key metrics such as deposits ahead of a quarter’s close to show stronger results. He added that such practices give no real benefit to banks or their customers because stakeholders understand the true financial position.
Malhotra said RBI’s instructions on these practices are clear and that supervisory officers closely monitor compliance. If any regulated entity deviates from the rules or engages in such practices, the RBI will take appropriate action.
Deputy Governor Swaminathan J said the banking system remains resilient and that isolated instances are dealt with through the supervisory process rather than in the public domain. He noted it is not easy to sustain a projected picture that does not reflect the true underlying conditions.
He added that banks and non‑bank financial companies remain resilient despite economic volatility. RBI will continue to monitor regulated entities through on‑site and off‑site supervision and take action wherever non‑compliance is detected.
The RBI’s stance signals confidence in the integrity of the banking sector and its ability to manage any short‑term discrepancies without harming the broader financial system.