Banks and NBFCs need to enhance their skillset to identify risks early, 1/5  BIS central bankers' speeches  measure them, mitigate the risk proactively and build up adequate provisioning buffers to absorb potential losses. They should also augment their internal stress testing framework with severe but plausible stress scenarios.
A tightening of policy may bring down inflation, but will not have any impact on the root of the problem being rising oil prices, and in fact would most likely exacerbate the fall in output and worsen the impact of the shock for households and businesses.