New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said slowing credit growth is one of the major challenges that banks are currently facing.
Loan growth in the system is hovering around 7 per cent, Das said.
"Slowing credit offtake is one of the challenges that banks are facing," he added.
Das also asked the banks to be prudent in lending and highlighted that the quality of appraisal is important. He said the RBI proposes to take thematic studies across financial institutions.
"The top 50 NBFCs are monitored very closely," he pointed out.
Speaking about Non-Banking Financial Institutions (NBFCs), Das said the credit flow to small NBFCs have improved over the last one year. "Flow of credit has stabilised and is showing steady improvement," he said, adding the credit flow to realty sector needs to improve.
Das said the issue of governance in public and private sector banks is of utmost importance and management of banks have a critical role to play in improving the governance. He noted that the regulations are in compliance with Basel III guidelines.