Two years on, RBI’s specialised supervisory cadre but to take off

Two years after the Reserve Bank of India’s Central Board cleared the creation of a specialised supervisory and regulatory cadre (SSRC) for efficient monitoring of the banking and monetary entities, the proposal is but to take off regardless of assurances given to the Parliamentary Standing Committee on Finance.
The determination to arrange an SSRC in 2019 got here after a sequence of occasions together with the IL&FS defaults, ICICI Bank mortgage challenge, Punjab National Bank fraud, DHFL fraud in 2019 and liquidity points within the NBFC sector. The Yes Bank and PMC Bank fiasco surfaced later amid complaints that the RBI was lax within the supervisory capabilities.
The scheme evoked lukewarm response from the RBI workers with solely a small quantity opting. The RBI Officers Association had opposed the proposal, saying the proposed cadre didn’t discover takers as a result of it was ready with out detailed examine, lacked readability, imaginative and prescient and expertise in administration. The proposal for the cadre seems to be within the backburner, with not a lot progress on its formation, mentioned a banking supply.
The RBI didn’t reply to a mail despatched by The Indian Express on the standing of the brand new cadre.
Officers within the cadre would lack the publicity in different areas, and, due to this fact, there may be an pressing have to evaluation the choice associated to SSRC, RBI unions had complained to the Governor. Another grievance of supervisory workers is that, historically, the supervisory vertical is at all times headed by a Deputy Governor coming from a public sector financial institution, resulting in a battle of curiosity. While the Standing Committee on Finance had questioned the RBI for failing to take pre-emptive motion in checking dangerous loans previous to the Asset Quality Review undertaken in December 2015, official sources mentioned the RBI acted rapidly when the difficulty cropped up and put 12 banks underneath the Prompt Corrective Action.
When Urjit Patel was the Governor, the central financial institution had mentioned in a letter to the Parliamentary panel that its supervisory course of doesn’t represent an audit of banks. With the variety of business financial institution branches being extra over 1,16,000, it could be not possible to cowl each department underneath the RBI’s supervisory course of, it had mentioned. The RBI at present has a Board for Financial Supervision, with 4 administrators from the Central Board as members and chaired by the Governor. Deputy Governors of the RBI are ex-officio members.