Indian central bank governor Shaktikanta Das on Thursday ruled out the possibility of the Reserve Bank of India (RBI) holding shares in banks, saying that “what is good for another market may not be good for us.”

His comments came after the U.S. Securities and Exchange Commission (SEC) approved changes to allow for the creation of bank-backed exchange traded funds (ETFs).

We have to be very careful in terms of our overall financial system stability,” Das said at the BF Associate Summit, organized by a media house. “We have to take into account the entire ecosystem and the entire financial system.

Das also reiterated the RBI’s stance on cryptocurrencies, saying that “what is good for another market may not be good for us.”

We have to be very careful in terms of the risks involved,” he said. “We have to be very careful in terms of the potential for money laundering, terrorist financing, and other illicit activities.

On the upcoming Union Budget, Das said that he did not expect it to be a major expansionary one.

Given the track record of the current government, from the interim budget to the full budget, I don’t think there will be a major expansionary budget, he said.

Das also referred to several measures taken by the government to tackle inflation since the start of the Russia-Ukraine war, including supply-side measures.

The government has taken a number of measures to address inflation, he said. These measures have been effective in containing inflation to some extent.

Das’s comments come at a time when the Indian economy is facing a number of challenges, including rising inflation, a weakening rupee, and geopolitical uncertainties.

Analysis

Das’s comments on bank shares and cryptocurrencies are significant because they provide further insight into the RBI’s thinking on these issues.

The RBI’s decision not to hold shares in banks is a departure from the practice of some other central banks, such as the U.S. Federal Reserve. The RBI’s reasoning is that holding shares in banks could pose a conflict of interest, as the central bank would be both a regulator and an investor.

The RBI’s stance on cryptocurrencies is also cautious. The RBI has previously warned of the risks associated with cryptocurrencies, such as money laundering and terrorist financing.

Das’s comments on the upcoming Union Budget are also significant. His expectation that the budget will not be a major expansionary one suggests that the government is focused on fiscal discipline.

Overall, Das’s comments provide a clear picture of the RBI’s thinking on a number of important economic issues.