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Last Updated : May 21, 2019 07:12 PM IST | Source: Moneycontrol.com

RBI to merge supervisory departments, hire consultants in major overhaul

The RBI's central board that met in Chennai on May 20, reviewed the present structure of supervision in light of growing diversity, complexities and inter-connectedness within the Indian financial sector.

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The Reserve Bank of India (RBI) will merge three of its departments and undertake lateral recruitment of consultants as part of a functional revamp aimed at improving efficiency in the area of banking supervision, one of the key roles of the apex lender.

"With a view to strengthening the supervision and regulation of commercial banks, urban co-operative banks and Non-Banking Financial Companies (NBFCs), the Board has decided to create a specialised supervisory and regulatory cadre within the RBI," the central bank said in a statement on May 21, after its central board meeting held in Chennai.

The RBI's central board that met in Chennai on May 20, reviewed the present structure of supervision in light of growing diversity, complexities and inter-connectedness within the Indian financial sector.

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There are three supervisory departments in RBI -- department of banking supervision, department of co-operative banking supervision, and department of non-banking supervision. These will be merged into one for better utilisation of supervisory resources.

The central bank has also started the process of hiring laterally. Last year, it invited applications for 61 vacancies in Grade C on a contractual basis. The vacancies were in the area of trade finance, corporate lending, treasury, retail lending, analytics, stress testing, accounting, and IT among others.

The need for better monitoring arises in the wake of recent defaults in the NBFC sector and failure of credit rating agencies and regulatory authorities to identify the threat in advance, which could have minimised the impact on the banking system. The renewed vertical will focus on picking up early signs of stress in the system going forward.

RBI said that the board also discussed issues related to the currency management and its functions as a banker to the government.

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First Published on May 21, 2019 07:12 pm
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