Mahesh Kumar Jain, the Deputy Governor of the RBI, made the recommendation during a speech titled, "Governance in Banks – Driving Sustainable Growth and Stability," which he presented at a conference organized by the RBI on Wednesday.

The RBI Governor noted that while India's banking system remains strong, stable and resilient through the collective efforts of the government, RBI and the banks, "addressing downside risks is vital for India's journey towards becoming a developed economy."

"Banks are needed to mobilize savings, promote financial inclusion, and facilitate job creation by supporting MSMEs, among others," Jain said. "We would like to highlight the importance of strong governance and leadership which are crucial for long-term health of the sector."

To help continue progressing forward, the RBI has been increasing its focus on data analysis as a way to assess both idiosyncratic as well as systemic risks to banks.

"By leveraging large volumes of data and advanced analytics techniques, it is possible to gain deeper insights into risk profiles of banks and identify potential vulnerabilities," Jain said. "The intention is to brief you on these initiatives so that banks can leverage on their own data analytic capabilities to make data-driven risk management decisions, improve risk assessment accuracy, and enhance their ability to anticipate risks."