We in RBI are hopeful that such an institutional arrangement will go a long way in improving services of banks. Any debate, any talk, any deliberations about the customer service in banking would remain incomplete without reference to the late Shri M.R. Pai, who pioneered the consumer protection movement in the banking sector.
First, the risks associated with short-term funding are as much or more macroprudential as they are firm-specific. From a microprudential perspective, SFTs are low risk, because the borrowing is short-dated, overcollateralized, marked-to-market daily, and subject to remargining requirements.