Reserve Bank governor Shaktikanta Das has put banks on the alert over the huge gap between the credit and deposit growth rates.

In a meeting with the chiefs of public and select private sector banks on Wednesday, Das called for a further improvement in governance standards, risk management practices and compliance culture.

Das stressed the need to ensure robust cybersecurity controls and effective management of third-party risks at the meeting.

He asked the bankers to step up their efforts against “mule accounts” and intensify customer awareness and education initiatives to stop digital frauds.

Mule accounts are set up by individuals who are duped by fraudsters into laundering money.

BioCatch, a leader in digital fraud detection, has warned that mule accounts were on the rise, with at least ₹1.8 crore passing through some of these accounts.

An RBI statement said Das’s meeting with bankers covered issues such as the
persisting gap between the deposit and credit growth, trends in unsecured retail lending, credit flows to MSMEs and increasing the usage of the rupee for cross-border transactions.

The RBI has been asking banks to step up their deposit growth, which has been lagging credit growth.

Recent data showed deposit growth in the system at 12.6 per cent against a 19.2 per cent rise in bank credit.

While lending rates are at elevated levels, banks have not raised the deposit rates in tandem so as to protect their margins.

According to the RBI, the meeting was part of its continuous engagement with the senior management of regulated entities.

The governor in his opening remarks noted the continued improvement in banks’ asset quality and loan provisioning.