IndusInd Bank crisis an 'episode', nota 'failure', banking system secure: RBI Governor

Reserve Bank governor Sanjay Malhotra has said the banking system remains “safe and secure” and described the accounting lapses at Indusind Bank and the restrictions on New India Cooperative Bank as “episodes” and not “failures.”

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The governor was responding to a question from the media on whether there are larger systemic concerns around the accounting lapses at the private sector lender and the failure of the city-based New India Cooperative Bank.

With over 10,000 non-banks and around 1,500 cooperative banks, occasional "episodes" are inevitable and those do not mean the system failed or even the entities concerned failed, the governor said at the customary post-policy press meet here Wednesday when the MPC headed by him cut the key interest rates for the second time in a row, taking the cumulative rate reductions 50 bps to 6%.