'RBI is working on strengthening its supervisory skills'
The central bank is in the process of setting up a college of Supervisors, in addition to an internal supervisory research and analysis wing. The move is significant in the wake of criticism that the central bank received for not anticipating th...
The central bank is in the process of setting up a college of Supervisors, in addition to an internal supervisory research and analysis wing. The move is significant in the wake of criticism that the central bank received for not anticipating the crisis at the co-operative bank- PMC Bank
“We are in the process of setting up a College of Supervisors to augment and reinforce supervisory skills among regulatory and supervisory staff” RBI governor Saktikanta Das said at an Economics Conference, at Amrut Mody School of Management, Ahmedabad University. “In addition, an internal supervisory research and analysis wing is being created to supplement and support regulatory and supervisory activities”
The recent unearthing of fraud at PMC Bank has brought up issues relating to their governance, prudent internal control mechanisms, and adequacy of checks and balances to the forefront.
In a bid to strengthen oversight of commercial banks, co-operative banks and NBFCs, the RBI has created a unified department of supervision (DoS) and a unified department of regulation (DoR) with effect from November 1, 2019.
The Reserve Bank is working with the Government to amend the Act governing co-operative banks. “We have suggested several legislative changes to the Central Government for better regulation and supervision of UCBs” Das said. “ On our part, we are reviewing the existing architecture of regulation and supervision of UCBs and shall carry out necessary changes in sync with the evolving requirements”.
The proposed national level Umbrella Organisation (UO) is expected to provide liquidity and capital support to member co-operative banks, and will therefore contribute to the strength and vibrancy of the sector.