Banks not spending IT budgets fully, says RBI Dy Guv Swaminathan J

Commercial banks in India are not spending their IT budgets, Reserve Bank of India (RBI) Deputy Governor Swaminathan J said, referring to recent instances of unscheduled downtimes inconveniencing customers. He also cautioned banks on interest-rate risks since a reversal in the interest-rate cycle could put pressure on their margins and profitability. Swaminathan spoke at the SBI Economic Conclave on Thursday. He said banks had to commit resources for augmenting their IT infrastructure commensurate with their business plans and also monitor them for their availability and stability. The deputy governor emphasised the need for banks to reconsider their involvement in lending arrangements with non-banking financial companies (NBFCs), particularly those involving many lenders, sometimes going up to 40.