Reserve Bank of India Governor Sanjay Malhotra has declared consumer satisfaction as the ultimate benchmark for measuring the central bank's success, signaling a fundamental shift in the institution's approach to financial regulation. Speaking in an exclusive interview with NDTV Profit, Malhotra emphasized that ordinary Indians are the final beneficiaries of the financial system, making their satisfaction paramount to regulatory effectiveness.

Strategic Campaign Initiatives

The RBI has implemented a series of targeted campaigns addressing persistent customer issues across the banking sector. The central bank launched a comprehensive financial inclusion and re-KYC campaign from July to October, designed to ensure customer accounts remain compliant and accessible.

Following the re-KYC initiative, the RBI coordinated with other regulators, banks, and government agencies to help citizens identify and claim unclaimed deposits. This collaborative approach addresses historical awareness gaps that have left substantial sums untouched in the banking system.

Streamlined Processes for Sensitive Situations

Recognizing the procedural challenges faced by families during difficult times, the RBI has prioritized reforms to reduce customer stress. The central bank has standardized and simplified the process for legal heirs to claim deposits of deceased account holders, addressing what Malhotra described as significant issues in accessing these funds.

"There are a lot of issues sometimes for claiming the monies and deposits of the deceased," Malhotra explained, noting that banks are now implementing the revised framework to eliminate delays and inconsistencies across institutions.

Digital Transformation and Accountability

The RBI has undertaken a comprehensive revamp of its citizens' charter to enhance transparency and operational efficiency. The central bank streamlined its service offerings by removing four unnecessary approvals from the original 204 services, bringing the total to approximately 200 services.

All services have been digitized through a centralized portal for regulated entities seeking approvals, licenses, registrations, or clarifications. The system operates under close monitoring, with performance data published monthly to ensure accountability.

Focus on Grievance Resolution

The central bank has intensified efforts to address customer complaints through its banking ombudsman system. Malhotra highlighted that clearing complaint backlogs is essential for restoring confidence in institutional redress mechanisms, making grievance resolution a priority area for immediate attention.

Long-term Commitment to Consumer-Centric Banking

These comprehensive measures represent a broader recalibration of the RBI's role toward becoming a more visibly consumer-facing institution. Malhotra emphasized that this transformation is not a temporary initiative but represents a fundamental shift in the central bank's operational philosophy.

The Governor made clear that consumer service and satisfaction will remain core priorities for the RBI in the years ahead, establishing a new paradigm where regulatory success is measured by citizen satisfaction rather than traditional institutional metrics.

Source: https://www.ndtvprofit.com/economy-finance/consumer-satisfaction-is-ultimate-test-of-rbis-success-says-governor-sanjay-malhotra

Reserve Bank of India Governor Sanjay Malhotra has outlined three primary factors driving India's sustained low inflation, which has remained below the central bank's target range of 2% to 6% for four consecutive months despite external headwinds and geopolitical challenges.

In an exclusive interview with NDTV Profit's Managing Editor Tamanna Inamdar, Governor Malhotra explained that the combination of softer food prices, flexible inflation targeting regime, and supply-side actions has created a favorable inflation environment supporting the Indian economy.

Food Price Dynamics and Base Effects

Governor Malhotra identified softer food prices as the first major driver, attributing this trend to significant base effects. "We had a very high food inflation earlier and so from a higher base, inflation now seems to be lower," he explained.

The recent inflation data demonstrates this trend clearly:

The RBI Governor emphasized that global commodity prices have also remained low, making this "more a supply-side phenomenon rather than a demand-side phenomenon." He noted that core inflation stands at 4.6%, but excluding precious metals inflation, it drops to just 2.3%.

Flexible Inflation Targeting Framework

The second key factor highlighted by Governor Malhotra is the flexible inflation targeting regime implemented by the RBI. The central bank maintains a standard target of 4% with a 2% band on either side, creating the 2-6% range.

"Over the years, ever since the central bank implemented the flexible inflation targeting, India's inflation levels have actually come down," Malhotra stated. He acknowledged that while this framework isn't the sole reason, it has contributed significantly alongside policy frameworks and government supply-side actions.

The RBI has completed a consultation paper on inflation targeting and submitted recommendations to the government, which will set future targets based on these inputs.

Supply-Side Actions and Policy Support

Governor Malhotra credited supply-side actions by the government and other stakeholders as the third crucial element in maintaining low inflation. These coordinated efforts have complemented the monetary policy framework to create a comprehensive approach to inflation management.

Forward-Looking Inflation Projections

The RBI expects inflation to gradually increase as base effects diminish. The central bank's projections indicate a controlled upward trajectory:

Consumer Impact and Survey Results

Addressing whether common citizens are experiencing the benefits of low inflation, Governor Malhotra referenced positive consumer survey responses. "Even in the consumer surveys, we find that the inflations that they feel or project are generally higher from what are actually reported, but they have come down," he noted.

The data from the Ministry of Statistics and Programme Implementation (MOSPI) clearly reflects the downward inflation trend, with consumer surveys indicating that people are indeed feeling the impact of lower prices.

Governor Malhotra expressed comfort with current inflation levels, particularly given the projected gradual increase ahead. The combination of supply-side improvements, effective monetary policy framework, and favorable base effects has created an environment where inflation remains well within manageable bounds while supporting economic growth.

Source: https://www.ndtvprofit.com/economy-finance/flexible-target-regime-to-softer-food-prices-rbi-governor-outlines-indias-low-inflation-story