Reserve Bank Of India English news | Reserve Bank Of India, Latest News & Live Updates in English | English News (Latest English News) at Lokmattimes.com

New Delhi, Dec 5 This has obviously made things lopsided when it comes to governance of Indian banks. For instance the Reserve Bank of India (RBI) can issue guidelines to private banks or foreign banks, but not to the PSBs. This anomalous duality may well be under review now with a course correction on the anvil. Can the Standing Committee on Finance provide answers to this conundrum?A throwback to this anomaly is when former RBI Governor Urjit Patel in a speech titled 'Banking Regulatory Powers Should Be Ownership Neutral' in March 2018 threw into stark relief that though the RBI is the banking regulator, the powers to regulate PSBs are held by the government.The government of India regulates PSBs under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; the Bank Nationalisation Act, 1980, and the State Bank of India Act, 1955.Patel had averred that Section 51 of the Banking Regulation Act (1949) distinctly states that the RBI does not have powers on critical aspects of governance in the PSBs.These are: The RBI cannot remove chaipersons, managing directors or directors of a PSB; the central bank cannot force a merger or liquidation in the case of the PSBs; the PSBs neither require licence from the top bank nor can it revoke their licence. Seized of this matter, action is being contemplated to correct this aspect of regulation and governance.However, in July 2018, the government had informed parliament in a conflicting statement that RBI has wide-ranging powers to regulate and supervise public sector banks.The government's statement countered RBI's position that the central bank lacked powers to regulate PSU banks, including dismissing banks boards and the management.In response to a query in the Rajya Sabha, the Centre had stated: "Powers of the RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks, including public sector banks. RBI has powers to inspect the bank and its book of accounts, has a nominee member on the board of state-run banks and is part of a committee within the board that approves large loans."RBI can appoint additional directors on the banks' boards... RBI has a repository for all large credit exposures as well as a central fraud registry where banks report all frauds above Rs 1 lakh. It also has powers under the foreign exchange management act."Despite a flourishing private sector banking space, the bulk of banking assets in India are with public sector banks which are under the Department of Financial services aegis.Many public sector bank scams have been unearthed over the years which have led experts to question duality of control.Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Reserve Bank Of IndiaFOLLOW

Reserve bank of india, Latest News

The Reserve Bank of India (RBI) has increased the repo rate by 35 basis points to 6.25 per cent ... ...

The Supreme Court on Tuesday said that it has the power to examine the manner in which the decision ... ...

Indian stock indices traded marginally lower in the morning session, largely due to continued profit booking by investors after ... ...

Chennai, Dec 6 With the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) expected to revise upwards ... ...

New Delhi, Dec 5 In what could be a major step towards reforming the Reserve Bank of India ... ...

The Reserve Bank of India is likely to hike rates in smaller magnitude in its December policy starting today ... ...

The Reserve Bank of India's three-day monetary policy committee meeting commences today. Financial markets will be keenly watching the ... ...

New Delhi, Dec 5 This has obviously made things lopsided when it comes to governance of Indian banks. ... ...