As his tenure as the 25th Governor of the Reserve Bank of India (RBI) draws to a close, Shaktikanta Das, in his final press conference on Tuesday, outlined the key challenges that lie ahead for the central bank, with a special focus on restoring the crucial balance between inflation and growth.
Reflecting on his six-year leadership, Das also warned about the growing risks posed by cybersecurity threats, particularly in a fast-evolving digital financial ecosystem.
Restoring Inflation-Growth Balance: A Key Priority for the Future
Das, who has steered the RBI through volatile economic conditions, emphasized that the task of maintaining a balanced approach to inflation and growth would be the foremost challenge for the RBI in the coming years.
“Restoring the inflation-growth balance is the most important task ahead of the Reserve Bank of India,” Das said, reflecting on his tenure and the challenges facing his successor. While inflation control has been a significant focus during his time at the helm, Das acknowledged that the central bank would need to remain vigilant and adaptive to global and domestic economic shifts that influence inflationary trends.
“The RBI’s role in managing this delicate balance will remain paramount in the years ahead. We must ensure that we continue to support economic growth while keeping inflation under control, a task that will require careful monitoring and timely interventions,” he added.
Under Das’s leadership, the RBI successfully navigated challenges posed by rising inflation, supply-side disruptions, and external shocks, but he emphasized that sustaining this balance will be critical in the future as the Indian economy grapples with both growth aspirations and inflationary pressures.
Cybersecurity: An Increasingly Agile and Complex Challenge
Another pressing concern highlighted by Das was the growing threat of cybersecurity risks. As digital payments and banking systems in India grow exponentially, cybersecurity has become an urgent priority for the central bank. Das described it as a “big challenge for every authority and particularly for central banks,” referring to the vulnerability of financial systems to cyberattacks and data breaches.
“Cybersecurity risks have become increasingly sophisticated, and it is not just a challenge for the RBI but for all financial institutions worldwide,” Das said. “As the world becomes more digitally interconnected, the threat landscape evolves rapidly. The RBI needs to be agile in responding to these risks, especially as digital payment systems continue to expand.”
He stressed that the RBI would need to become more “agile” in its response to emerging cybersecurity threats. “As financial systems become more interconnected, the agility with which we respond to these challenges will be crucial,” he warned. “Our capacity to safeguard the integrity of India’s financial infrastructure will depend on how swiftly and effectively we can adapt to these evolving threats.”
In particular, Das pointed to the role of new-age technologies such as Central Bank Digital Currencies (CBDCs) and other digital financial platforms, noting that while they hold tremendous potential, they also bring new risks.
“As we innovate and move towards digital currencies, the central bank must fortify its systems against evolving cybersecurity threats,” he added, stressing the need for a robust security framework to protect India’s financial ecosystem.
Technological Advancements and UPI’s Global Leadership
In his address, Das also lauded the RBI’s efforts to embrace technological advancements during his tenure. He spoke highly of the success of the Unified Payments Interface (UPI), which, under the RBI’s oversight, has emerged as a global leader in digital payments.
“UPI today has emerged as a global leader in tech systems. It is a testament to the potential of India’s digital financial infrastructure,” Das said. “We have seen remarkable growth in UPI transactions, and it has become a model for other countries to follow. The RBI is proud to have played a pivotal role in the development of this revolutionary platform.”
Das also expressed optimism about the future of Central Bank Digital Currencies (CBDCs), which he believes will transform global finance.
“CBDC has huge potential. In fact, it’s the future of currency,” he said. “India is poised to lead in this space, and the RBI will continue to explore how digital currencies can support the broader goals of financial inclusion and economic stability.”
A Legacy of Professionalism and Consultation
Reflecting on his six years at the helm, Das reiterated his commitment to maintaining the professionalism and autonomy of the RBI, a principle he had laid out at the beginning of his tenure.
“When I first joined the RBI in December 2018, I made a pledge to uphold the professionalism and autonomy of this great institution,” Das remarked. “I hope that I have lived up to that promise, ensuring that the RBI’s decision-making process remained independent and rooted in sound economic principles.”
Das also emphasized the importance of consultations with stakeholders, noting that much of the RBI’s policy decisions had been shaped by extensive dialogues with government officials, economists, and industry leaders.
“Engaging with stakeholders has been at the core of our approach. Whether through direct face-to-face consultations or the release of white papers, we’ve worked to ensure that our policies are inclusive, transparent, and well-informed,” Das said. “Consultation is key to fostering a collaborative approach that serves the broader interests of the economy.”
A Vision for the Future
Das concluded his farewell address by acknowledging the new challenges that would face the RBI in the years to come. While inflation management and cybersecurity would be pivotal, he noted that the RBI must continue to foster innovation, maintain financial stability, and enhance transparency in an increasingly complex global economic environment.
“The challenges may evolve, but the mission of the Reserve Bank will remain constant: to ensure the stability of India’s financial system, to drive innovation in digital payments and currencies, and to maintain the trust of the people in the system,” he said.
As Shaktikanta Das prepares to step down on Tuesday, his legacy as a steady hand during times of economic uncertainty, a champion of digital financial innovation, and a defender of the RBI’s autonomy will be remembered. His successor, Revenue Secretary Sanjay Malhotra, will now take the reins, inheriting a complex landscape shaped by both the achievements and the challenges outlined by Das in his parting remarks.
“The future of the RBI lies in embracing change, balancing innovation with security, and ensuring that the stability of the economy is upheld through all future challenges,” Das concluded, leaving a clear message for those who will continue the journey ahead.
