RBI strengthening institutional mechanism to prevent bank frauds: Nirmala Sitharaman

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New Delhi: Finance Minister Nirmala Sitharaman on March 16 informed the Parliament that the Reserve Bank of India (RBI) is taking measures to strengthen its regulatory and supervisory capacity, and expressed hope that these steps will ensure no regulatory mishaps take place in the future.

“We have been engaging with the RBI to ensure that the regulatory functions and supervisory function of the RBI are strengthened. I am assured by the RBI Governor that internally an institutional mechanism is being further strengthened,” Sitharaman said during Question Hour in the Rajya Sabha.

She was responding to a query asked by SAD leader Naresh Gujral that if the government is contemplating taking additional steps to strengthen the regulatory regime if banks have to thrive and people to be protected, given the recent banking frauds.

The finance minister said the capacity of the RBI’s regulatory and supervisory staff is being strengthened with specially tailored courses.

“I hope this will make a difference in order that no such further regulatory mishaps happen,” she said. Responding to another query addressing gaps in bank guarantees, the minister said this aspect will be looked into as the RBI is engaging with the ministry on this matter also.