Mumbai: The RBI is working on extending its enforcement role to cooperative banks and non-banking finance companies (NBFCs). The move follows recent developments in Punjab & Maharashtra Cooperative Bank and mortgage lender DHFL.

The issue of widening the enforcement role was taken by the RBI board at its central board meeting at Bhubaneswar.

The RBI had set up an enforcement department in 2017 to deal with cases where banks were non-compliant with regulations, which came to the notice of the regulator through its surveillance mechanism. The enforcement department was to replace the system of each department of the RBI taking individual action against banks for violation of rules.

In the case of PMC Bank, the lender has been violating a host of RBI regulations for several years. With DHFL too, a forensic audit revealed irregularities in the lending, which resulted in the company being admitted under insolvency proceedings.

In the meeting, chaired by RBI governor Shaktikanta Das, the board reviewed the current economic situation and domestic and global challenges. The board took up the annual report on ‘Trend and Progress of Banking in India’ for the year 2018-19 and other policy and operational issues. Deputy governors N S Vishwanathan, B P Kanungo and Mahesh Kumar Jain and other directors — N Chandrasekaran, Bharat Doshi, Sudhir Mankad, Manish Sabharwal, Ashok Gulati, Prasanna Kumar Mohanty, Satish Marathe, Swaminathan Gurumurthy and Revathy Iyer, attended the meeting. Finance secretary Rajiv Kumar also attended the meeting.

Published On : 13-12-2019

Source : Times of India