Minister of State in the Ministry of Finance, Mr. Santosh Kumar Gangwar informed Lok Sabha that Reserve Bank of India (RBI) is planning to set up a separate in-house Enforcement Department which will be operational from 3rd April 2017.
- This Department will be responsible for framing broad policy related to enforcement and take action against registered entities that violate it. It will function as centralised department to deal with banks exclusively for enforcement action such as issuing warning or imposing penalty.
In a press release, RBI had mentioned about crucial aspects of financial sector oversight mechanism, which are as follows:
Regulation: It defines the broad framework within which financial entities function by ensuring prudence, transparency and comparability and also protects the interests of consumer.
Surveillance: Process which monitors/supervises the conformity with regulation
Enforcement: Deals with cases of non-compliance with regulation detected by surveillance or through other reference.
Currently RBI has clear demarcation of regulatory and surveillance functions. The enforcement function was being looked after by banking and non-banking supervision department
- Thus the creation of Enforcement Department will be a further demarcation and function of surveillance and enforcement will be separated.
Quick Facts about Reserve Bank of India:
- Commencement of Operations: 1st April 1935
- Headquarters: Mumbai
- Current Governor: Mr. Urjit Patel