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DFS Secretary Urges Banks to Prioritize Risk Management Amid Global Volatility

DFS Secretary Nagaraju emphasized the need for Indian banks to strengthen risk management as a core strategic capability amid global uncertainties and cyber threats. Speaking at the IBA Summit in Mumbai, he urged banks to embed risk culture across all functions and protect vulnerable customers. Nagaraju praised the banking sector's resilience, credit growth, and reduction in NPAs despite external challenges. The summit also featured IBA Chairman CS Setty and saw the unveiling of an industry risk survey and essay compendium.

Key Points: DFS Secy Nagaraju Urges Banks to Fortify Risk Management

  • DFS Secretary Nagaraju calls for embedding risk culture across all banking functions
  • Summit highlights need for resilient banks amid global volatility and cyber threats
  • Nagaraju unveils industry risk survey and essay compendium with top 30 entries
  • Banks urged to protect vulnerable customers and empower Chief Risk Officers
3 min read

DFS Secy Nagaraju urges banks to fortify "risk management" amid global volatility

DFS Secretary Nagaraju calls on Indian banks to embed risk management as a core strategic capability amid global uncertainties, cyber threats, and geopolitical challenges.

"In an era of global uncertainty, strengthening our risk culture is the ultimate competitive advantage for Indian banks. - Nagaraju"

Mumbai, May 7

In a move to safeguard India's financial stability against a backdrop of global economic shifts, the Secretary of the Department of Financial Services, on Thursday stressed the need for strengthening risk culture across banks, saying risk management must become a core strategic capability amid growing global uncertainties and evolving cyber threats, according to the Ministry of Finance.

Speaking at the inaugural session of the first Indian Banks' Association (IBA) Summit on Risk Management in Mumbai, Nagaraju said, "In an era of global uncertainty, strengthening our risk culture is the ultimate competitive advantage for Indian banks."

"Risk management, therefore, must be embedded in the culture of every bank," he said, urging institutions to integrate it across all banking functions.

The summit, themed "Navigating Uncertainty: Building Resilient Banks", was also addressed by IBA Chairman and State Bank of India Chairman CS Setty, who outlined the banking industry's strategic priorities for institutional resilience.

During the session, Nagaraju unveiled a comprehensive industry risk survey and a commemorative essay compendium featuring the top 30 entries from a nationwide competition that received over 650 submissions from banking professionals.

Highlighting the resilience of the Indian banking sector, the DFS Secretary said that despite multiple challenges, "the economy is growing well and the banking sector is stable and performing well."

He praised the leadership of Public Sector Banks (PSBs) for systematically reducing Non-Performing Assets (NPAs) and noted substantial credit growth across agriculture, MSME and corporate sectors.

Referring to global tariff issues and geopolitical conflicts, Nagaraju said India's economy continues to demonstrate strong underlying fundamentals despite external challenges.

On technology integration in banking, he acknowledged the benefits of digital infrastructure but cautioned against rising cyber vulnerabilities.

"Customer trust is the foundation of banking. Every bank must ensure that customers, particularly small businesses, senior citizens, first-time digital users, and the vulnerable segments are adequately protected," he said.

Nagaraju also advocated governance led by senior management to build a strong risk culture and called for empowering Chief Risk Officers (CROs) with adequate independence and resources.

He commended the Indian Banks' Association for its role in strengthening the banking sector and noted that risk management has evolved beyond traditional compliance mechanisms.

The summit was attended by senior policymakers and banking leaders, including Executive Director of Indian Overseas Bank T. Dhanaraj, Executive Director of Bank of India Rajiv Mishra, Executive Director of Punjab National Bank Amit Kumar Srivastava, and Professor at IIM Bangalore M Jayadev.

- ANI

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Reader Comments

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Sarah B
It's good to see Indian banks focusing on risk management. As someone who works in finance in the US, I can tell you that strong risk culture is what saved many banks during the 2008 crisis. India's growth story is impressive, but we must not become complacent. The cyber threat part is especially timely.
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Vikram M
As a small business owner in Pune, I've seen firsthand how banks have improved their risk assessment. But I hope this doesn't mean more red tape for honest borrowers. The real test will be how they balance risk management with lending to MSMEs like mine. Still, a step in the right direction.
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James A
Interesting perspective from an Indian context. The global economy is indeed volatile with trade wars and geopolitical tensions. I visited Mumbai last year and was impressed by the digital banking infrastructure. But cyber security is a global challenge—no country is immune. Glad to see proactive leadership here.
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Priya S
The point about protecting senior citizens is so important! My parents still struggle with digital banking and are scared of scams. Banks need to have more physical touchpoints for vulnerable segments, not just fancy apps. Risk management should include human-centric solutions, not just tech.
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David E
Having worked in banking regulation in the UK, I can say India is on the right track. The NPA reduction is remarkable—from double digits to below 3% in some banks. But the real challenge is maintaining that discipline during a credit boom. Empowering CROs with independence is a smart move that many Western banks still struggle with.

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