International Monetary Fund (IMF) and the World Bank have commended the Reserve Bank of India (RBI) for the remarkable progress in strengthening banking supervision.
In the reports of the 2017 India Financial Sector Assessment Programme (FSAP) – the Financial System Stability Assessment (FSSA) and Financial Sector Assessment (FSA), released by the International Monetary Fund (IMF) and the World Bank, respectively on their websites noted that the supervision and regulation by the Reserve Bank remain strong and have improved in recent years.
The Report providing ‘Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision’ and the Report providing ‘Detailed Assessment of Observance of Clearing Corporation of India Limited (CCIL) Central Counter Party (CCP) and Trade Repository (TR)’, said that Most of the Basel III framework (and related guidance) has been implemented and cooperation arrangements, both domestically and cross-border, are now firmly in place.
India has welcomed these Assessment Reports by the joint IMF-World Bank team conforming to the highest international standards. The reports state that the system-wide asset quality review and the strengthening of prudential regulations in 2015 testify to the authorities’ commitment to transparency and a more accurate recognition of banking risks.
It also acknowledges that banking reforms, including the Indradhanush Plan for revitalizing the Public Sector Banks (PSBs) and the Bank Board Bureaus (BBBs) have helped usher in an era of transparency and improved discipline and will go a long way in resolving the problem of bad loans in India.