Clearing Systems To Be Tightened

The Reserve Bank of India (RBI) has informed the joint parliamentary committee (JPC) probing the recent stock market scam that monitoring of clearing systems in the country is being rehauled significantly.

Following the recommendations of the working group, set up in April 2001 to suggest improvements in monitoring of clearing systems, the RBI said it has decided to assign specific responsibility to its own regulatory/supervisory departments--that is, the department of banking supervision (DOS) or the department of banking operations and development (DBOD) or the urban banks department or the rural planning and credit department--depending on the type of the clearing member bank.

 

That is, its own internal departments will be held responsible for the shenanigns of individual clearing banks. In similar vein, it says that its national MICT clearing cell will be headed by a senior officer of the rank of general manager, assisted by a deputy general manager, "who will be responsible to monitor the clearing movements/settlements on a regular, continuing basis and follow up with the bank, wherever required."

Taking the issue of fixing responsibility further, the RBI says a central monitoring cell is being set up at the RBI central office level in its department of information technology. An internal group headed by an executive director is to be constituted at the central level to monitor information reported by its regional offices.

Further, it is setting up a management information system which would provide branch-wise information on clearing trends. The RBI said this information would be "of utilitarian value in monitoring trends in respect of specific branches which have presentations/drawings beyond a cut-off point so that any volatile variation could be located immediately on a day-to-day basis."