This refers to “Not home alone” by Anup Roy (July 17). The article has raised relevant questions on the duality of control over financial institutions including banks and non-banking financial corporations (NBFCs) at the ground level and answered them referring to the evolution of the regulatory and supervisory system in the financial sector over the years.
There is no use lamenting the omissions and commissions of the past. The FSLRC (Financial Sector Legislative Reforms Commission) took a tangential route trying to reinvent the central bank and truncate its functional limbs. The FSLRC failed to listen to professionals among its own members. The piecemeal approach to policy formulation affecting the financial sector during the second half of the current decade is attributable to the diversion by the FSLRC from its real mandate.
Having said that, there is no denying that the government of India and the Reserve Bank of India (RBI) have been deftly building the institutional system in the financial sector to meet the changing needs. The setting up of IDBI, NABARD, NHB, SIDBI and Exim Bank at the apex level and also the SBI, the public sector banks, regional rural banks and small banks should be seen in this perspective. The missing link is an HR initiative to ensure professionalism in the functioning of all these institutions. The RBI board's decision “to create a specialised supervisory and regulatory cadre” should be perceived as a message to infuse professionalism at all levels in the financial sector.
M G Warrier, Mumbai