In a move to strengthen the country’s financial sector, the Reserve Bank of India (RBI) Governor Raghuram Rajan asserted that there was considerable introspection going on within the central bank for formatting a new regulatory structure as a number of RBI’s internal committees are assessing the various concerns like need of seamless regulations and the level of regulatory arbitrage required while regulating institutions with similar functions.
Concerned over rising NPAs level of banks in India, the Governor highlighted the need for banks to improve their 'credit risk management' skills as well as power over the borrowers. The apex bank is also working on new bankruptcy law and distress resolution mechanisms, which would help to address the issue. He further highlighted that banks should work hard to bring inflation down along with inflation premium and the credit risk premium.
Expressing the need to improve human resources, RBI chief stated that the central bank is planning to introduce more training institutes for banks’ employees and set tests for banks’ top officials, and accord a 'fit and proper’ criteria for directors that would include grasp over the basics of the business, annual reports, balance sheets and risk management.
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