news details |
|
|
| RBI needs regional watchdogs to monitor banking | | | Prabhakar Kulkarni
The development of various regions in a country depends on availability of funds for various economic and business activities and banks and financial institutions are expected to provide them. While a network of banks is spread over a large and multi-state country like India, the regulatory mechanism needs to be strong and comprehensive enough to monitor and review the economic scenario. While the Reserve Bank of India is trying its best to supervise and set matters right, the reality demands modified measures and the RBI’s new leadership is expected to proceed further to streamline banks’ activities in the larger public interest.
While the RBI has statutory control over the nationwide banking system in nationalised, private and now the co-operative banking sector, it’s own administrative machinery seems to be in need of some support system, so as to let it review and get reports of what is going on in urban and rural India. This is particularly with regard to banking activities which are expected to give momentum to provide services to consumers.
In view of providing equal opportunities for each individual or institution, a number of schemes have been introduced by both the RBI and the Union government. But the manner in which banks are responding is not periodically ascertained. There are a large number of complaints for the schemes initiated by the Central and state governments that bankers do not respond to. For instance, schemes for the educated unemployed, introduced by the Union government known as ‘Prime minister rojgar yojana’ (PMRY) have not been encouraged by nationalised banks even though the schemes are sanctioned by the district industries centres working under state governments.
The scheme of ‘instant credit facility’ introduced by the RBI, with strict instructions to nationalised, private and co-operative banks is also not carried out properly. According to the scheme, any common consumer should get instant clearance of cheques, local or outstation, deposited in their accounts. But the specific scheme of instant clearance and credit up to Rs 15 thousand in nationalised banks and private banks and Rs 7500 in co-operative banks is avoided and shelved by most of the banks. Due to such disservice, all sectors of the economy or industry and the corporate sector, besides individual customers, suffer.
With regard to government’s schemes like PMRY, bank managers are reported to be brushing them aside by describing them as ‘social banking’. This attitude indicates that social banking is not ‘regular’ banking and if banks lose funds involved in such banking they stand to lose. This means that banks still claim that they are interested in profit and the social aspect which is inherent in the principle of nationalisation, is not their prerogative.
The co-operative banking sector is also under the RBI’s control as per the memorandum of understanding between state governments and the RBI. Now that the dual control is removed, the RBI is expected to monitor and regulate the large network of co-operative banks in the country. But it cannot merely indulge in superficial inspections which is in practice. It should be more penetrating, so as to disclose the lacunae and laxity, besides the directors’ allegedly autocratic stance, in operating transactions most of which are responsible for the recent liquidation of some co-operative banks.
The RBI needs regional watchdogs for reviewing banking transactions and what is exposed in local print media. The arrangement to get duly informed about these details as also about ‘market intelligence’ in monetary transactions should be the first priority without which the RBI will not be able to monitor the banking sector and to take regulatory and when necessary punitive actions against banks in the interest of consumers.
The RBI which is legally vested with strict regulatory authority needs equally strong and comprehensive network either of its own or based on the new principle of outsourcing. The earlier the RBI carries out the scheme for it, the better it is for large number of consumers’ interests in various parts of the country. |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
|
 |
|
|
