RBI report calls for fine-tuning institution scanning after IL&FS crisis

The IL&FS crisis posed serious ramifications for the financial sector with the group having as many as 301 subsidiaries

Taking stock of the contagion risks posed by Infrastructure Leasing and Financial Services (IL&FS) crisis, the Financial Stability Report (FSR) of the Reserve Bank of India (RBI) underlined the need for fine-tuning the oversight framework related to financial conglomerates (FCs) for more timely action. 

“A risk-sensitive FC oversight regime where the intrusiveness of oversight of FCs is proportionate to a combination of the size of the entity and the likelihood of an adverse event (say, over a one-year horizon), may make possible remedial measures more timely. Some of the suggestive trigger events for conducting an FC’s assessment may be adverse