RBI deputy governor Viral Acharya exhorted banks to build “its own immunity and strength” by putting in place processes for efficient management of interest rate risks. The banks need to manage the interest rate risks in a better way, he said. “Interest rate risk of banks cannot be managed over and over again by their regulator. “Recourse to such asymmetric options—heads I win, tails the regulator dispenses—is akin to the use of steroids. Stating that such measures are not “rocket science”, Acharya said managing the interest rate risks better requires governance mechanisms at the highest levels, an incentive to manage it, and a top-down organisational strategy to implement.

Source: Mint January 15, 2018 16:30 UTC