RBI advisory group for primary regulator

Our Banking Bureau

Mumbai, June 6: THE advisory group on banking supervision constituted by the Reserve Bank of India (RBI) has recommended that the apex bank should consider the desirability of introducing and participating in a scheme of formalised coordination between different regulators.

The group, in its final report, also says that one of the regulators must be designated as a primary regulator with clearly assigned roles and responsibilities to coordinate between different regulators in the country.
The group on banking supervision had Mr MS Verma, chairman of the Telecom Regulatory Authority as chairman with Mr Janki Ballabh, State Bank of India’s chairman; Mr KR Ramamoorthy, Vysya Bank chairman; and Mr HN Sinor, managing director of ICICI Bank, as members.

One of the important recommendations made by the group was in respect to corporate governance, was related to constitution of bank boards and their accountability. "It should be same in all types of banking organisations irrespective of their ownership", the group said.

The group suggested correction of the overlapping in RBI’s role as owner or owner’s representative and as regulator/supervisor. Government ownership of banks was not seen as being conducive to any serious and urgent corrective action by the regulator.