Incidents like the accounting lapses in IndusInd Bank or the crisis in New India Cooperative Bank are ‘episodes’ and can’t be termed as ‘total failure’ in a financial system which has a large number of players, Reserve Bank of India Governor Sanjay Malhotra said today.

Malhotra reassured that overall India’s banking system is safe, secure and robust.

He was responding to a question about whether there were larger systemic concerns around the lapses at IndusInd Bank, New India Cooperative Bank and Aviom India Housing Finance.

In this large system with almost 10,000 NBFCs and around 1,500 cooperative banks, cases of failure in the last 7-8 years are very small compared to the overall size, he said.

"So these things will happen. Our effort is to minimise the impact...I would not call them total failure, these are episodes," he said.

Malhotra underlined that the RBI's multi-layered regulatory framework that includes routine inspections, compliance audits, and internal monitoring mechanisms ensure that the financial system remains stable and responsive.

Speaking on the issue, Deputy Governor Swaminathan Janakiraman said RBI will deal appropriately with those accountable if it finds there were lapses.

"We never waste a good crisis, and there will be learnings," Swaminathan said, adding, "It is our intention to minimize and ensure that the customers remain protected even if accidents play out."

In each of these crises, RBI has taken adequate steps to ensure that customer inconvenience is minimized and customer money is protected to the extent possible, he added.

Private sector lender IndusInd Bank on 10 March disclosed certain accounting discrepancies in its derivatives portfolio.

As per an estimate, Rs 2,100 crore discrepancy in accounting may impact 2.35% of the bank's net worth.