RBI Central Board meet: Regulation of cooperative banks, NBFCs taken uphttps://indianexpress.com/article/business/banking-and-finance/rbi-central-board-meet-regulation-of-cooperative-banks-nbfcs-taken-up-6065084/

RBI Central Board meet: Regulation of cooperative banks, NBFCs taken up

“In this context, the board also discussed in detail the current state of the financial sector with special focus on the regulatory and supervisory architecture of commercial and cooperative banks as also NBFCs,” the central bank said in a statement.

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Besides, the board reviewed the current economic situation, global as well as domestic challenges, and various areas of operation of the Reserve Bank.

A day after Finance Minister Nirmala Sitharaman said the government is looking at bringing in necessary regulations and amendments for better regulation of multi-state cooperative banks and the possibility of a hike in insurance cover for bank deposits, the Central Board of the Reserve Bank of India (RBI) on Friday discussed the regulatory and supervisory architecture of commercial and cooperative banks against the backdrop of the Rs 6,200 crore scam at the Punjab and Maharashtra Co-operative Bank (PMC Bank).

Besides, the board reviewed the current economic situation, global as well as domestic challenges, and various areas of operation of the Reserve Bank.

“In this context, the board also discussed in detail the current state of the financial sector with special focus on the regulatory and supervisory architecture of commercial and cooperative banks as also NBFCs,” the central bank said in a statement.

While the PMC Bank fraud has unnerved depositors in co-opertaive banks, the NBFC sector has been facing liquidity woes and other headwinds for many months following the IL&FS fiasco last year. Sitharaman had said the Finance Ministry has set up a committee that will be chaired by two secretaries of the Ministry of Finance and will also have a Deputy Governor level RBI official participating in it. RBI Governor Shaktikanta Das had recently said the central bank will “review all the regulations” of cooperative banks and discuss it with the government if required.

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The Central Board meeting, chaired by RBI Governor Shaktikanta Das, also discussed the role of payments banks and small finance banks in enhancing financial inclusion. The annual activity reports of local boards, various sub-committees of the board and functioning of a few central office departments were also deliberated upon at the meeting. A strategy sub-committee of Central Board of Directors has been formed, the statement said.

RBI deputy governors N S Vishwanathan, B P Kanungo and Mahesh Kumar Jain attended the meeting. Other directors of the Board — N Chandrasekaran, Bharat Doshi, Sudhir Mankad, Manish Sabharwal, Ashok Gulati, Prasanna Kumar Mohanty, Dilip S Shanghvi, Satish Marathe, Swaminathan Gurumurthy, Revathy Iyer and Sachin Chaturvedi — also attended the meeting. Finance Secretary Rajiv Kumar and Economic Afffairs Secretary Atanu Chakraborty too participated at Friday’s meeting.