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 remains unanswered. From a common man's point of view, the government of India and the RBI need to collaborate and find a solution. The RBI on its part must do all it can to gather early warning signals of a fraud and carry out pre-emptive strike before it is too late. The reputation of both the RBI and the government is at stake and it is up to them to save the common man from the predators.
Sanjeev Kumar Singh, Jabalpur
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