RBI panel to vet recommendations on financial sector reforms

The Reserve Bank of India (RBI) has decided to constitute a committee to examine the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) relating to capacity building in the banking sector.

The committee under the chairmanship of G Gopalakrishna, executive director, RBI, will examine if the members on bank boards need to be certified - by way of say, an appropriately designed course, which could be made mandatory for every individual before appointment to the board of a bank.

The report of the Financial Sector Legislative Reforms Commission (FSLRC) had made certain recommendations on enhancing skill building and capacity development in banks and non-banks regulated by the Reserve Bank of India in order to ensure availability of skill sets at all levels for effective delivery on required roles and responsibilities.

The committee has been tasked with the responsibility of identifying capacity building requirements keeping in view the role of financial sector and what it should deliver.

The panel will examine the skills required at various levels / operations to deliver on the required role and also identify qualifications relevant to specific areas of operation in banks and non-banks. Further, it will evolve methodologies for prescribing certification for required qualifications.

Besides its chairman Gopalakrishna, the committee will have Indian Banks' Association CEO Mohan V Tanksale, Bank of Baroda executive director Ranjan Dhawan, ICICI Bank executive director K Ram Kumar, Federal Bank Ltd CEO Shyam Srinivasan, Indian Institute of Banking and Finance CEO R Bhaskaran, National Institute of Bank Management (Pune) director Achintan Bhattacharya and principal chief general manager of RBI's department of non-banking supervision N S Vishwanathan as members.

The FSLRC, which was set up in March 2011 to find ways of strengthening the legal and institutional framework of the country's financial sector in tune with the contemporary requirements of the sector, submitted its report last March.

It has made important recommendations pertaining to nine areas, including consumer protection, micro-prudential regulation, capital controls, systemic risk, monetary policy, public debt management, contracts, trading and market abuse.

The RBI committee will deliberate on the following:

  • Identify capacity building requirements keeping in view the role of financial sector and what it should deliver;
  • Examine the skills required at various levels / operations to deliver on the required role,
  • Identify qualifications relevant to specific areas of operation in banks and non-banks, and
  • Evolve methodologies for prescribing certification for required qualifications.

The committee is expected to submit its recommendations by 20 April 2014.