RBI chief asks PSBs to improve fraud risk management
RBI Governor Shaktikanta Das has recently asked state owned banks to follow the latest guidelines for resolution of stressed assets and to accelerate the recovery process. He has also addressed several other issues in a pre-policy meeting.
In an official statement, the RBI said that the Shaktikanta Das has given impetus to the resolution of stressed assets facilitated by the revised framework for resolution in a meeting with the CEOs of public sector banks and the Chief Executive of Indian Banks Association (IBA). As per the latest guidelines declared by the RBI, lenders will have to enter into an Inter-creditor Agreement within a month of default. Following that, the consortium will adhere to a deadline of 180 days in order to implement the resolution framework.
RBI said, “Governor acknowledged discernible improvements in the banking sector while underscoring that several challenges still remain to be addressed, particularly with regard to the stressed asset resolution and credit flows to needy sectors.”
“The Governor also pointed out that the level of transmission of monetary policy rates was “less than desired”, as quoted from the official statement released by RBI. The governor also held discussion with state owned banks over different ways to improve recovery efforts. Among the other key issues that were issued, improving fraud risk management and deepening digital payments.
The prompt to improve fraud risk management comes after yet another scam surfaced after Punjab National Bank and Allahabad Bank reported fraud of around Rs 5,000 crore by Bhushan Power and Steel. As far as deepening of digital payments is concerned, Mr Das has asked banks to identify one district in each state to make it completely digitally-enabled in a year in collaboration with all stakeholders, including SLBCs, state governments, and regional offices of RBI.
The customary pre-policy meet was attended by the top executives of around 20 lenders including State Bank of India, Bank of Baroda and Bank of India. The Monetary Policy Committee is scheduled to meet on August 5-7 to review interest rates.