“What Determines Household Expectations?”Authors: Aditi Singh, Assistant Professor, CAFRAL (with Anushka Mitra)
Abstract: This paper examines which macroeconomic signals shape household expectations and finds that unemployment shocks play a more influential role than inflation shocks. Using daily data, we identify which announcements prompt households to revise their expectations. Labor market news strongly influences both general economic sentiment and inflation expectations, with unemployment shocks dominating even when inflation rises and unemployment falls.
“Identifying Hand-to-Mouth Households: Evidence from India”Authors: Aditi Singh, Assistant Professor, CAFRAL (with Vivek Gupta and Fiorella Pizzolon)
Abstract: This paper investigates the prevalence and characteristics of poor and wealthy hand-to-mouth households in India. Using harmonized survey data and machine learning models, the study finds that wealthy hand-to-mouth households comprise 15–27% of the population, far exceeding poor hand-to-mouth households. Results highlight the importance of distinguishing between liquidity and net worth when evaluating consumption behavior and policy transmission.
“Show Me the Dowry: How Traditional Customs Affect Education in Rural India”Authors: Natasha Jha, Assistant Professor, CAFRAL
Abstract: This study examines the impact of stricter anti-dowry laws on educational attainment in rural India. While dowry payments declined, female education also fell, especially in communities with higher dowry prevalence. Families substituted reduced female education as a signal of adherence to tradition, revealing unintended consequences of anti-dowry legislation.
“Agriculture and Arsenic: Can Overextraction of Groundwater Make Us Sick?”Authors: Natasha Jha, Assistant Professor, CAFRAL
Abstract: This paper shows how groundwater irrigation in India contributed to arsenic contamination. Districts with richer groundwater endowments have significantly more unsafe habitats, especially where deep tubewells were adopted early. Findings highlight long-term environmental consequences of irrigation technology choices.
“Shaping Future Success: Evidence from an Early Childhood Human Capital Formation Intervention”Authors: Natasha Jha, Assistant Professor, CAFRAL (with Deepak Saraswat, Shwetlana Sabarwal, Lindsey Lacey, Nishith Prakash, and Rachel Chazan-Cohen)
Abstract: Evidence from a large-scale randomized controlled trial in Nepal shows that classroom quality improvements combined with parental engagement raised children’s developmental outcomes by 0.10–0.20 standard deviations. The helper model proved most effective, sustaining classroom quality and caregiver engagement, with the largest gains among disadvantaged households.
“Minimum Support Prices in Indian Agriculture: Supporting Whom and at What Price?”Authors: Natasha Jha, Assistant Professor, CAFRAL (with Shilpa Agarwal and Ishani Chatterjee)
Abstract: This paper finds that India’s minimum support prices are politically influenced, with higher MSPs announced in crops linked to upcoming state elections. The policy acts as a blunt instrument when other tools are unavailable, raising consumer prices and reducing welfare.
“Unequal Transmission: Monetary Policy and Household Consumption in India”Authors: Aditi Singh, Assistant Professor, CAFRAL (with Fiorella Pizzolon)
Abstract: Using high-frequency identification of monetary surprises, this paper shows that contractionary shocks have heterogeneous effects on household consumption, income, and employment. Rural households, women, and lower-caste groups experience larger declines, underscoring the importance of distributional channels in monetary policy transmission.
“Aggregate Savings in India: Where Do We Go From Here?”Authors: Aditi Singh, Assistant Professor, CAFRAL (with Prachi Mishra)
Abstract: This paper analyzes the decline in India’s savings rate since 2007. Findings suggest that increased prosperity explains much of the decline in household savings, while demographic changes offset part of the effect. Forecasts indicate a further decline in household savings as a share of GDP over the next five years.
CAFRAL conducted a two-day program on Credit Risk and Stressed Asset Management on September 22–23, 2025. Shri C. Sankaranarayanan, Senior Program Director, CAFRAL outlined the program overview, emphasizing the main areas of focus.
Shri Manas Ranjan Mohanty commenced the program with a warm welcome to all participants and delivered the inaugural address, highlighting the ever-changing dynamics in the credit risk landscape of the banking industry.
The program discussed the evolving macro-economic environment and the current lending scenario, with a focus on credit flow across various segments. It also deliberated on the issues and challenges in financing emerging sectors, followed by insights into credit risk management using data analytics and AI/ML across the loan lifecycle. The sessions examined risk-based
pricing and RAROC, as well as the evolving changes in credit risk management and expected loan loss provisioning. The program further explored various tools and strategies for recovery. The discussions also centered on early warning signals and monitoring of the credit portfolio, supervisory observations and concerns relating to credit risk management in financial intermediaries, and the impact of the Insolvency and Bankruptcy Code on behavior in the credit market. Additionally, the program covered issues and concerns in the digital lending and co-lending ecosystem, concluding with deliberations on dynamic portfolio management and credit risk stress testing.
As the program concluded, Shri C. Sankaranarayanan, Senior Program Director acknowledged the valuable participation of all speakers and attendees, thanking them for their thoughtful engagement and contribution to the enriching deliberations.
CAFRAL organised a two-day Program for Non-Executive Chairman & Directors on the Boards of Banks, FIs and NBFCs on September 9-10, 2025. Shri Manas Mohanty, Additional Director, CAFRAL, commenced the program with a warm welcome and delivered the inaugural address emphasizing the principle - “The Board is as good as the Management - and the Management is only as good as the Board.”
Shri R. Lakshmi Kanth Rao, Executive Director, Reserve Bank of India gave the keynote address, deliberating on governance and compliance frameworks essential for building operational resilience in the financial sector. The program discussed key aspects requiring Board-level attention for risk-based supervision. The discussions also covered financial crime risk management and explored HR challenges in financial institutions, underscoring the importance of leadership and human capital in sustaining performance. Another important theme centred on the management of stressed assets and evolving approaches under the Insolvency and Bankruptcy Code. The program additionally examined the strengthening of fraud risk management through effective early warning systems. It provided a strategic overview of enterprise-wide risk management and the interplay between governance and business growth. Participants also gained insights into governance considerations related to IT and cyber security risk. The deliberations further extended to the roles and responsibilities of directors across key Board committees in banks, NBFCs, and financial institutions, offering a holistic understanding of governance expectations and the evolving responsibilities of Board members.
The program concluded with a heartfelt thanks from Shri C Sankaranarayanan, Senior Program Director, CAFRAL who expressed his gratitude to all the speakers and participants for their active engagement and valuable contributions to the program.
CAFRAL organized a two-day Conference of Chief Risk Officers: Evolving Risk Landscape on August 21-22, 2025. Shri C. Sankaranarayanan, Senior Program Director provided an overview of the program, highlighting its structure and key themes.
Shri Manas Ranjan Mohanty, Additional Director commenced the conference with a warm welcome and addressed the Chief Risk Officers and other distinguished participants by elaborating on how to manage risk and drive innovation through psychological safety. He highlighted how the banking industry is at a fascinating juncture where opportunities and risks coexist, particularly with advancements in technology, and how economic growth remains robust despite prevailing uncertainties.
The keynote address, delivered by Shri Dinesh Khara, Former Chairman, State Bank of India, where he spoke about the re-imagining of risk in the face of tomorrow’s evolving threat landscape. This was followed by a special address by Shri Jayant Kumar Dash, former Executive Director, Reserve Bank of India on the shifting risk horizon and rising regulatory expectations. The conference deliberated on crisis management, including business continuity metrics and methodologies, and further examined key aspects of model risk management and approaches to navigating market volatility. It also focused on the comprehensive toolkit approach of the RBI for operational resilience, along with discussions on new-age strategic risk management frameworks in an era shaped by automation and data analytics. The sessions covered next-generation security challenges driven by AI/ML and included a detailed panel discussion on the human element in risk management, leadership pipeline development, fostering a risk-aware culture, and balancing business needs with risk considerations. Participants also deliberated on third-party risk management, evolving regulatory challenges, industry best practices, and shared their experiences.
The conference concluded with closing remarks by Shri C. Sankaranarayanan, Senior Program Director who conveyed his gratitude to all speakers and participants for their insightful deliberations and the depth they brought to the discussions.
CAFRAL conducted a one-day Virtual Program for Compliance and Risk Officers of Axis Bank Ltd., on August 07, 2025. An overview of the program was delivered by Shri C. Sankaranarayanan, Senior Program Director setting the context for the sessions ahead.
Shri Manas Ranjan Mohanty, Additional Director commenced the program with a warm welcome and inaugural address.
The program discussed key themes central to strengthening compliance and risk management in financial institutions. It focused on effective compliance practices in banks and the evolving regulatory expectations shaping them. The governance, risk, and compliance framework—and its role in embedding a strong and sustainable compliance culture—was also deliberated, followed by an examination of the enforcement framework for non-compliance. The sessions highlighted the importance of proactive and effective risk management and provided insights into risk-based supervision and the assessment of compliance risk. The program further explored financial crime from a KYC–AML perspective, emphasizing regulatory concerns and expectations, and concluded with a detailed discussion on cyber security within the governance, risk, and compliance landscape.
In closing, Shri C. Sankaranarayanan, extended his sincere thanks to the speakers and the participants from Axis Bank for their active involvement and constructive contributions throughout the program.
CAFRAL organized a two-day Program on Financial Frauds & Forensic Audit on August 4- 5, 2025. Shri Manas Mohanty, Additional Director, CAFRAL, commenced the program with a warm welcome and delivered the inaugural address.
The program discussed a wide range of issues related to frauds and financial crimes, beginning with an overview of the evolving regulatory and supervisory landscape. Participants were exposed to key insights on various types of financial frauds, financial crimes, and investigative approaches. The sessions also deliberated on strengthening fraud risk management through robust internal frameworks, followed by discussions on forensic audit methodologies, tools, and analytical techniques used to detect irregularities. The program further examined how financial and ratio analysis can assist in uncovering fraud, along with practical aspects of conducting internal investigations. The discussions deepened into specialised areas such as trade-based money laundering frauds, the use of technology to prevent frauds in loan accounts, and emerging trends and tools for combating digital frauds. The program also covered legal elements of fraud investigation, including evidence collection, record maintenance, and legal resolutions, supported by relevant use cases. Participants additionally shared experiences, enriching the collective understanding of real-world challenges and best practices in fraud prevention and investigation.
CAFRAL organized a one-day Virtual Program on Asset Liability & Liquidity Risk Management on July 29, 2025. Shri Manas Mohanty, Additional Director, CAFRAL, commenced the program with a warm welcome and inaugural address.
The program discussed a broad spectrum of themes related to liquidity risk management and balance sheet resilience in the financial sector. The sessions covered the management of liquidity risk by financial sector players, along with a detailed deliberation on ALM and liquidity risk management, including contingency funding plans and stress scenarios. The programme also deliberated on liquidity risk and solvency, focusing on contractual maturity mismatches and the monetisation of assets. Another important area of discussion was ALM, intra- day liquidity, and strategic balance sheet management, highlighting the importance of sound liquidity planning. The risks arising from interlinkages and concentration of funding across banks, NBFCs, mutual funds, and AIFs were also examined. Additionally, the program discussed the classification and valuation of investment portfolios and the management of interest rate risk in the banking book, offering participants a holistic understanding of the key challenges and risk dynamics in liquidity and balance sheet management.
The program concluded with a heartfelt thanks from Shri C Sankaranarayanan, Senior Program Director, CAFRAL acknowledging the contributions of all speakers and participants.
CAFRAL conducted a two-day Program on Know Your Customer (KYC) and Anti Money Laundering (AML) for Senior Executives in Risk and Compliance Department in Banks, FIs and NBFCs on July 21-22, 2025. The program overview was presented by Shri C. Sankaranarayanan, Senior Program Director outlining the structure and key focus areas of the sessions
Shri Manas Ranjan Mohanty, Additional Director addressed the distinguished participants with his inaugural address. He set the context by discussing how Operation Red Stinger highlighted breaches and gaps in the KYC–AML framework, including methods of converting black money into white by fragmenting large deposits. He further emphasized that KYC–AML is not merely a banking concern but a strategic issue. It forms an integral part of the broader global financial security framework.
The program offered a comprehensive overview of KYC and AML
risk management, covering emerging regulatory and compliance issues along with key supervisory observations and practical use cases. Sessions highlighted the Central KYC Registry, responsibilities of Reporting Entities, and the role of enterprise risk management in strengthening KYC and AML practices. Participants gained insights into the application of data analytics, advanced technologies, and RegTech for effective compliance, as well as critical themes such as trade-based money laundering, recent fraud case studies, and capital market regulations relating to financial crime. The discussions further explored transaction monitoring challenges, the future direction of financial crime risk management, and perspectives on combating financial crime from the FIU.
The program concluded with a heartfelt Thanks from Shri C. Sankaranarayanan, Senior Program Director, CAFRAL who expressed gratitude to all the speakers and participants from banks, Financial Institutions and NBFCs for their active engagement and valuable contribution to the program.
CAFRAL organized a one-day Virtual Program on Customer Education and Protection: Issues & Challenges on July 16, 2025. Shri Manas Mohanty, Additional Director, CAFRAL, commenced the program with an inaugural address, emphasizing the importance of strong institutional framework required for effective customer service, customer protection, and grievance redressal.
The programme discussed a wide range of themes central to strengthening customer service in the financial sector. The keynote address delivered by Shri Neeraj Nigam, Executive Director, Reserve Bank of India outlined the broader framework for customer service, consumer protection, and regulatory expectations. The program deliberated on root-cause analysis of maintainable complaints, the strengthening of grievance- redressal mechanisms and strategies to financial education to empower consumers. The discussions also explored challenges faced in delivering effective customer service in the financial services sector, along with the use of technology for enhancing customer service and consumer protection. The program also highlighted the legal aspects of consumer complaints and insights from consumer forum cases, providing participants with a comprehensive understanding of the operational and regulatory dimensions of consumer-centric practices.
The program concluded with a heartfelt thanks from Shri C Sankaranarayanan, Senior Program Director, CAFRAL who expressed gratitude to all the speakers and participants for their active engagement and valuable contributions.