The Hindu Business Line : Final RBI norms on securitisation soon

Mr V. Leeladhar (left), Deputy Governor, RBI, and Mr Niall S. K. Booker, Group General Manager & CEO, HSBC India, at a conference on `Indian Banks and the Global Challenges' in Mumbai on Tuesday. - - Paul Noronha

Mumbai , Jan. 31

THE Reserve Bank of India is likely to issue the final guidelines on securitisation by Thursday, said the Deputy Governor, Mr V. Leeladhar. The RBI had issued the draft guidelines in April 2005.

Speaking at a seminar organised by the Indian Banks' Association and Indian Merchants Chamber, Mr Leeladhar said the final guidelines would include a number of useful suggestions from the main players. The volumes in the securitisation market were likely to increase following the guidelines, he said.

Following the IPO scam, the RBI is in the process of conducting a series of inspections into the compliance systems of banks, Mr Leeladhar said. "It is a continuous effort," he said.

When asked if the amount of penalty levied on the banks was less, the Deputy Governor said, "A penalty by the RBI is a loss to the reputation of banks. Banks have to disclose it in their balance sheet."

On January 23, the RBI had imposed penalties on seven banks - - Bharat Overseas Bank Ltd, Citibank, HDFC Bank, ICICI Bank, Indian Overseas Bank, Standard Chartered Bank and Vijaya Bank - - for violating banking regulations with regard to `Know your Customer' norms.

The RBI is considering accounting standards for derivatives jointly with the Institute of Chartered Accountants of India, Mr Leeladhar said. "It has to pass through a lot of discussions as these are complicated and sophisticated methods," he said. He declined to put a timeframe on when the accounting standards would be ready.