Das expressed particular concern regarding the rapid growth of lightly regulated private credit markets, emphasizing the excessive growth in unsecured loans within sectors like gold, mortgage, and microfinance.

During an event in New Delhi on October 14, 2023, RBI Governor Shaktikanta Das highlighted the transformative impact of AI on the financial sector, while also warning of significant risks to financial stability.

He noted that the increasing reliance on AI has introduced vulnerabilities, including heightened risks of cyberattacks and data breaches.

Das raised alarms about the global surge in public debt, which reached 93.2% of GDP in 2023 and is projected to hit 100% by 2029, warning that this trend constrains monetary policy.

He characterized the current period as a 'watershed' moment for central banks, as they navigate challenges posed by inflation, public debt, and geopolitical tensions.

Inflationary pressures and unconventional monetary policies further complicate the landscape for central banking, necessitating a careful balancing act.

Das cited the sharp appreciation of the Japanese Yen in August as a prime example of how divergent monetary policies can disrupt global financial markets.

As AI technology becomes more prevalent, global central banks are urging collaboration among financial institutions, regulators, and tech providers to create a robust regulatory framework.

He pointed out that microfinance institutions and housing finance companies are seeking excessive returns on equity, often driven by investor pressure.

In response to rising financial exuberance, the RBI has tightened regulations on credit cards and personal loans, making borrowing from banks more expensive for non-bank lenders.

Das noted that rising interest rates are increasing debt servicing costs and market volatility, posing risks to asset quality.

He stressed the importance of maintaining control within the banking sector to prevent dominant technology companies from dictating the financial landscape.