Chennai: A specialised cadre will be created within the Reserve Bank for supervision and regulation of financial institutions, including banks and NBFCs, the RBI Tuesday said.
This move assumes significance at a time when non-banking financial companies (NBFCs) are facing severe liquidity crunch in the wake of IL&FS crisis.
The decision to create a specialised supervisory and regulatory cadre within the RBI was taken at the meeting of the Central Board of the apex bank headed by Governor Shaktikanta Das. It was 576th meeting of the RBI Central Board.
The board also reviewed the current economic situation, global and domestic challenges and various areas of operations of the central bank, the RBI said in a statement.
"With a view to strengthening the supervision and regulation of commercial banks, urban cooperative banks and non-banking financial companies, the board decided to create a specialised supervisory and regulatory cadre within the RBI," it said.
Among other important matters, the board discussed the medium-term strategy document, covering, inter-alia, the mission statement and the vision statement.
"The board also reviewed the present structure of supervision in the RBI in the context of the growing diversity, complexities and interconnectedness within the Indian financial sector," the central bank added.
Issues related to the currency management and banker to government functions of the RBI also came up for discussion.
Deputy Governors N S Vishwanathan, Viral V Acharya, B P Kanungo and Mahesh Kumar Jain besides RBI's Central Board of Directors Bharat Doshi, Sudhir Mankad, Manish Sabharwal, Satish Marathe, Swaminathan Gurumurthy, Revathy Iyer and Sachin Chaturvedi attended the meet.
The government directors Subhash Chandra Garg, Finance Secretary and Rajiv Kumar, Secretary, Department of Financial Services also attended the meeting.
Earlier this month, Corporate Affairs Secretary Injeti Srinivas in an interview to PTI had said that the NBFC sector was facing issues of credit squeeze, over-leveraging and misadventures by some large entities.
"There is an imminent crisis in the NBFC sector. There is a credit squeeze, over-leveraging, excessive concentration, massive mismatch between assets and liabilities, coupled with some misadventures by some very large entities, which is a perfect recipe for disaster," Srinivas had said.(This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI)