Growth with Responsibility: The Next Balance Sheet - Special Address by Shri Swaminathan J, Deputy Governor, Reserve Bank of India at the FE Modern BFSI Summit 2026 in Mumbai on October 15, 2026 -

The address presented growth, trust and resilience as connected responsibilities for India’s financial sector. The system enters its next phase with improved asset quality and comfortable capital positions. But technology, outsourcing and greater interconnection can create new vulnerabilities if controls do not keep pace.

The speaker offered three propositions. Controls must evolve as institutions remove friction and automate work. Trust needs continuous investment in conduct, service quality and grievance handling. Resilience means more than holding buffers; institutions must also detect problems, decide quickly and recover effectively.

The message is especially relevant during the festive season, when households and businesses make major spending and investment decisions. Digital onboarding, artificial intelligence and autonomous workflows can expand access and lower costs. Yet every removed step should have a clear replacement control, and regulated institutions must retain responsibility for outsourced activities.

“The Next Balance Sheet” describes the broader condition a financial institution must build for its future. Growth measures expansion, trust reflects customer confidence, and resilience reflects the ability to withstand and recover from disruption. Together, they show whether growth is durable rather than merely fast.

The article explains that trust is an asset even though it does not appear explicitly on the balance sheet. It can be damaged through poor sales practices, weak service, bad grievance handling or inappropriate data use. Resilience also goes beyond capital buffers. It includes how quickly an institution detects a problem, makes a decision and recovers.

This framework matters as finance becomes more technology-intensive and interconnected. Digital tools can reduce costs and friction, but they also change risk. Institutions therefore need controls suited to new processes, continued investment in customer confidence and recovery capabilities that match the pace of change.

The source does not quantify the size of India’s banking and financial-services system, so no defensible scale figure can be drawn from it. It does establish that the sector is economically important because finance converts confidence into economic activity. Banks and other institutions connect customers with decisions about spending, investment and enterprise growth.

The article gives practical examples. During the festive season, households may purchase homes, while businesses may expand enterprises. Financial institutions help support those choices through credit and other products. When finance works well, it can reduce costs, improve customer access and make transactions easier.

Growth therefore affects people beyond the institutions themselves. A stronger, more trusted system can support wider activity, while weak controls can create fraud, error or poor customer outcomes. The article’s forward-looking point is that expansion must be matched by controls, responsible conduct and resilience as technology and interconnection increase.

Independent verification, maker-checker approval and cooling-off periods may look like delays, but they often perform important control functions. They can reduce errors, fraud and adverse selection. Removing them without understanding their purpose may make a process faster while increasing the chance of harmful outcomes.

For example, an institution might replace a manual check with an algorithm or make underwriting instantaneous. The key mechanism is that the underlying risk remains even when the process changes. A new automated control must therefore perform the same protective function, with oversight suited to the technology.

This issue becomes more important as institutions pursue scale and customer convenience. The article advises asking what risk the old step controlled and where that control now resides. If the answer is unclear, the institution may have removed protection rather than genuine inefficiency.

When a bank or other regulated institution uses a fintech, external platform or third-party model, the process may be outsourced but responsibility is not. The institution remains accountable for the activities conducted under its licence. This protects customers from gaps in oversight created by complex delivery chains.

The article gives several examples: a loan may be sourced through a fintech, a product distributed through an external platform, or a decision supported by a third-party model. These arrangements can improve reach and efficiency. However, the regulated institution must understand the risks, controls and decisions embedded in the outside process.

This principle becomes more important as finance grows increasingly technology-intensive and interconnected. Institutions should ensure that control responsibilities remain clear, even when work is automated or performed elsewhere. Convenience and scale cannot replace supervision of the customer journey or accountability for its outcomes.

Trust is built through conduct, service quality and effective grievance handling, but it can weaken quickly when institutions prioritise transactions over customer needs. The article notes that trust may be damaged through customer attrition, litigation, regulatory penalties and reputational harm. Strong business volumes do not prove that customers are being served well.

For example, sales incentives may reward completing a transaction more than checking whether a product suits the customer. Technology can also personalise offers and reach customers more often, increasing the consequences of poor incentives. Data use creates another test: consent alone is not enough if the use is inconsistent with what the customer expected.

Weak complaint handling can allow early warning signs to grow. Institutions may underinvest in these areas during profitable periods because the returns seem less immediate. The article’s implication is clear: trust requires continuous investment before damage becomes visible in financial and regulatory consequences.

Asset quality concerns the soundness of an institution’s assets, especially whether its exposures remain reliable. Capital buffers provide capacity to absorb losses and continue operating. Resilience is broader: it includes the institution’s ability to detect trouble, make decisions and recover after a shock. These qualities support durable growth.

The article states that India’s financial system currently has improved asset quality and comfortable capital positions. Those strengths provide a foundation, but they are not sufficient by themselves. A bank may hold buffers yet still respond poorly if it cannot identify emerging problems or act quickly. Technology and interconnectedness make that response capability more important.

The forward challenge is to preserve financial strength while processes become faster and more automated. Institutions need controls that match new risks, clear accountability for third parties and systems that support rapid detection and recovery. Resilience therefore combines financial capacity with operational speed and sound judgement.