RBI plans Supervision of Banks through its Specialized Structure

Based on the recommendations of an internal committee under the current executive director in charge of NBFC supervision, the Reserve Bank of India approved creating a specialized supervisory and regulatory structure for commercial banks, urban cooperative banks and non-banking financial companies (NBFCs).

This specialized structure will include consolidating the different supervisory and regulatory activities and resources under a separate division.

“This is a massive exercise and RBI will start on it immediately. It is yet to be decided who will head this structure as the current deputy governor N.S. Vishwanathan is set to retire in one-and-a-half months,” the official added.

The Reserve Bank of India has taken this move due to ongoing rating downgrades of non-banks which has raised fears of another liquidity crisis.