]
Business: SBI turned from its 2018 losses to a $100 billion company due to regulatory reforms by the Reserve Bank of India. RBI Governor Sanjay Malhotra made this claim. Addressing the SBI Banking and Economics Conclave 2025, the Governor said that the transformation of India’s banking sector has been made possible by a strong regulatory framework as well as key policy measures initiated by the RBI and the government. He said that the Chairman of State Bank of India was just telling that they were in loss in 2018. And now they are a 100 billion dollar company.
IBC completely changed the credit culture
He emphasized that the Insolvency and Bankruptcy Code (IBC) implemented in 2016 has completely changed the credit culture of the country. According to experts, this law has increased financial discipline among borrowers and improved the asset quality of banks.
Along with monetary stability, economic stability also strengthened
Malhotra said that several major reforms have been undertaken in the last few years, which have strengthened not only monetary stability but also macroeconomic stability. These include steps like adopting a flexible inflation targeting system, deepening the forex market and gradually liberalizing the capital account. He said that these reforms have promoted transparency and accountability in the financial system, thereby further strengthening the foundation of the Indian banking sector.
After 2014, India worked on a new principle
Malhotra said that there was a time when India was counted among the Fragile Five economies of the world and at that time there was deep pressure on the country’s financial system. But from 2014 onwards, following the principle of ‘never let a good crisis go to waste’, India initiated fundamental reforms for the long-term strengthening of the financial system.
He explained that this transformation was based on three key pillars: identification, resolution and recapitalization. The Asset Quality Review (AQR) process, started in 2015, forced banks to identify their actual loan book positions and uncover hidden NPAs. At the same time, the Prompt Corrective Action (PCA) framework played an important role in improving the health of weak banks.
