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click here to return to main page of Highlights of Annual Policy Statement 2005-06
Highlights of Annual Policy Statement for the Year 2005-06
Developmental and Regulatory Policies
CIBIL is working out a solution that would provide comprehensive credit reports on SSIs.
The Reserve Bank is reviewing all its existing guidelines on financing small scale sector, debt restructuring, nursing of sick units, etc., with a view to rationalising, consolidating and liberalising them. Banks are urged to take the revised guidelines as indicative minimum requirement and the Boards of the banks are expected to formulate more liberal scheme as appropriate.
Under a scheme to be drawn up by the RBI, banks will be encouraged to establish mechanisms between their branches and branches of SIDBI which are located in 50 clusters that have been identified by the Ministry of Small Scale Industries, Government of India for enhancing credit to small industries.
The Reserve Bank will explore modalities to meet the growing financial needs of medium enterprises.
RBI is in the process of reviewing the performance of RRBs and exploring restructuring of RRBs.
Issues regarding priority sector lending need to be debated and examined in depth.
To issue guidelines on merger and amalgamation between private sector banks and with NBFCs. The principles underlying these guidelines would also be applicable as appropriate to public sector banks, subject to relevant legislation.
Half-yearly discussion with the CEO of the financial conglomerate convened by the lead regulator with other regulators.
Banks are urged to refocus on deposit mobilisation and empower the depositors, by providing wider access and better quality of banking services.
RBI will persist with its efforts to ensure quality of banking services, in particular, to small individual depositors.
RBI will implement policies to encourage banks which provide extensive services while disincentivising those which are not responsive to the banking needs of the community, including the underprivileged.
The nature, scope and cost of services will be monitored to assess whether there is any denial, implicit or explicit, of basic banking services to the common person.
Banks are urged to review their existing practices to align them with the objective of financial inclusion.
To set up an independent Banking Codes and Standards Board of India on the model of the mechanism in the UK in order to ensure that comprehensive code of conduct for fair treatment of customers are evolved and adhered to.
To issue appropriate guidelines to banks to ensure transparency and disclosure of information by the card issuing banks and customer rights protection including facilitating enforcement of such rights.
To widen the scope of the Banking Ombudsman inter alia to cover all individual cases/grievances relating to non-adherence to the fair practices code evolved by IBA and adopted by individual banks.
In order to maintain consistency and harmony with international standards, banks advised to adopt Standardised Approach for credit risk and Basic Indicator Approach for operational risk with effect from March 31, 2007. The Reserve Bank may consider allowing some banks to migrate to Internal Rating Based (IRB) approach after developing adequate skills both in banks and at supervisory levels.
The Reserve Bank would enter into bank-wise dialogues relating to ownership and governance in private banks to ensure a time-bound framework for compliance.
On the basis of the feedback, the draft guidelines on securitisation of standard assets would be finalised.
The guidelines on sale/purchase of non-performing assets would be finalised on the basis of feedback.
Draft circular on CDR is being put in the public domain for wider dissemination before taking final decisions.
The Report of the Working Group on Conflicts of Interest in the Indian Financial Services Sector (Chairman: Shri D.M. Satwalekar) would be put in the public domain for wider dissemination before recommending for adoption.
The Vision Document for Payment and Settlement Systems indicating action points would be placed in the public domain for wider dissemination.
A Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) was constituted as a Committee of the Central Board of RBI as notified in the Gazette of India on February 18, 2005
The Reserve Bank proposes to operationalise National Electronic Funds Transfer (NEFT) System and NEFT (Extended).
Banks are encouraged to make increasing use of SFMS which is PKI-enabled for inter/intra bank transactions.
In order to facilitate the technology plans of the financial sector, RBI is preparing a Financial Sector Technology Vision Document which would be put in the public domain.
A medium-term framework for UCBs up to 2010 would be placed in the public domain for wider dissemination and for implementation as appropriate.
RBI has begun a consultative process involving officials of the concerned state governments and banks for revitalising and rehabilitating the weak scheduled UCBs.
RBI is examining the issue of smooth flow of bank finance to NBFCs.
The Standing Committee on Procedures and Performance Audit on Public Services (Chairman: Shri S.S. Tarapore) constituted by RBI has ceased its operations in March 2005. In order to facilitate regular monitoring, Ad hoc Committees in banks have been converted to permanent Standing Committees on Customer Service.
First Quarter Review of Part I to be undertaken on July 26, 2005.
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