The Reserve Bank of India (RBI) has announced that its board has decided to create a separate supervisory and regulatory cadre within the bank after reviewing the current supervisory structure.
The central bank said in a statement that, “With a view to strengthening the supervision and regulation of commercial banks, urban co-operative banks and Non-Banking Financial Companies (NBFCs), the Board has decided to create a specialised supervisory and regulatory cadre within the RBI.”
There are three supervisory departments in RBI — department of banking supervision, department of co-operative banking supervision, and department of non-banking supervision. These will be merged into one for better utilisation of supervisory resources.
The move comes in the wake of recent defaults in the NBFC sector and failure of credit rating agencies and regulatory authorities to identify the threat in advance, which could have minimised the impact on the banking system. The renewed vertical will focus on picking up early signs of stress in the system going forward.
The meeting was chaired by RBI Governor Shaktikanta Das in Chennai. The 576th meeting of the central board also reviewed the current economic situation, global and domestic challenges, and various areas of operations of the central bank.