The deputy governor of the RBI calls for fair competition in the banking industry

 The deputy governor of the RBI calls for fair competition in the banking industry

Rao went on to say that our recommendations on digital lending, first loss default guarantee (FLDG), and the microfinance industry are examples of this strategy in action.

On November 2, Rajeshwar Rao, the deputy governor of the Reserve Bank of India (RBI), made a case for fair competition in the banking industry.

Everyone agrees that one of the most important prerequisites for a competitive banking industry is equal playing fields. At the "same activity, same risk, same regulation" premise, which is what we as regulators adhere to, Rao said at the "Excellence Enablers"-organized Gatekeepers of Governance Summit in Mumbai.

Rao went on to say that the first-loss default guarantee (FLDG), the microfinance industry, and our recommendations on digital lending are examples of this strategy in action.

According to the deputy governor, a level playing field guarantees that all players function under an equitable and uniform regulatory framework where the financial system's possible risks and benefits are proportionately distributed.

According to him, restrictions must be commensurate to the dangers that the company poses to the financial system in order to ensure equal playing fields.

"We are quite mindful of having to ensure that the regulatory burden on a corporation should be proportionate to the risks that it poses to it to the financial system regardless of the size of its operation," Rao said.

Rao said at the end of his speech that we understand the regulatory process needs to provide a net surplus for the financial sector.