Letter to BS: RBI should own up to its failure in regulating banks

The larger question of how to suitably compensate the hapless victims of bank frauds remains unanswered

The collapse of PMC Bank has once again brought the issue of effective regulation of banks into focus. The Reserve Bank of India (RBI) is entrusted with the responsibility of regulation of banks. Hence, the RBI cannot escape being questioned whenever a bank regulated by it fails. With a spate of banking scams recently, the feeling is getting stronger that the RBI should own up to its failure in regulating banks and make its regulatory mechanism more robust so as to detect frauds early.
 
But the larger question of how to suitably compensate the hapless victims of bank frauds