RBI to create a ‘Specialised Supervisory and Regulatory Cadre’
The Reserve Bank of India’s (RBI’s) Central Board has decided to create a ‘Specialised Supervisory and Regulatory Cadre’ within the RBI.
About: The decision to create a Specialised Supervisory and Regulatory Cadre within the RBI was taken at the recent two-day meeting of Reserve Bank of India’s (RBI’s) Central Board which was held under the chairmanship of RBI Governor Shaktikanta Das in Chennai. This was the boards 576th Meeting.
Objective: The cadre creation came with a view of strengthening the supervision and regulation of commercial banks, urban cooperative banks and Non-Banking Financial Companies (NBFCs).
Importance: The decision for creating an additional oversight mechanism was taken in the wake of recent NBFC crisis such as large-scale defaults by IL&FS in 2018 (which caused on-going liquidity crunch in banking system), failures by credit rating agencies to flag risks, alleged lapses by auditors and divergence in asset quality by big banks. Thus the supervision cadre would supplement RBI to be better equipped in picking up early warning signs.
Key Discussions at RBI’s Central Board Meeting
- It reviewed the current economic situation, global and domestic challenges and various areas of operations of RBI.
- It reviewed the present structure of supervision in RBI in light of growing complexities, diversity and interconnections within the Indian financial sector.
- It also discussed issues related to currency management and Banker to Government functions of the RBI.
- It also discussed the Medium Term Strategy document, which covers RBI’s Mission and Vision Statements.
Categories: Economy & Banking Current Affairs