Mumbai, Dec. 31 -- Reserve Bank of India (RBI) governor Sanjay Malhotra on Wednesday called for balancing pragmatic regulation and supervision with fostering innovation, growth and consumer protection.

In his foreword to the central bank's half-yearly Financial Stability Report, he said maintaining financial stability and strengthening the financial system remain the regulator's north star.

"But financial sector regulators recognize that financial stability is not an end in itself," he said.

According to Malhotra, these objectives are mutually reinforcing and vital for increasing productivity and long-term economic growth. "The most important contribution the policymakers can make is to foster a financial system that is robust and resi...