Financial Daily from THE HINDU group of publications
Friday, Nov 25, 2005
Financial Daily from THE HINDU group of publications Friday, Nov 25, 2005 |
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Financial Services Money & Banking - RBI & Other Central Banks RBI cell to monitor financial conglomerates Our Bureau
Mumbai , Nov. 24 THE Reserve Bank of India has said it has constituted the Financial Conglomerate Cell (FCC) within the Department of Banking Supervision in the wake of many financial conglomerates emerging in India. The FCC is a nodal agency which co-ordinates with the two other domestic regulators - the Securites and Exchange Board of India and the Insurance Regulatory and Development Authority of India - on the supervision of financial conglomerates. The RBI said it has also put in place an oversight framework, which envisages periodic sharing of information amongst regulators on concerns arising out of analysis of data received from conglomerates and sharing of any other materially significant information. "RBI's recent initiative to hold half-yearly discussion meeting with the Chief Executive Officer of the conglomerate in association with other principal regulators to address outstanding issues would further strengthen the system of sharing information among domestic supervisors," RBI said in its report on `Trends and progress of banking in India 2004-05'. According to RBI, several important players in the financial system have a presence in more than one market. Operations of financial conglomerates with overseas presence also raises concerns, it said. There is no legislation in India, which provides for collaborative arrangements or sharing of information among the supervisors. "Till such time a legal framework for cross-border supervision is enacted, supervisory co-ordination could be initiated by executing general or specific MoUs to address risks associated with financial conglomerates and promote systemic stability," RBI said.
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