Rbi-Bank Chiefs Meet On Feb 17

The Reserve Bank of India (RBI) has called for a meeting of chiefs of leading banks on February 17, 2000, to thrash out issues pertaining to the recently issued draft guidelines on insurance sector, and also discuss other issues like corporate governance and investment made by banks in non-SLR securities.

This apart, the RBI will also discuss with banks the progress made through the settlement advisory committee, and in the implementation of integrated risk management system including asset-liability management guidelines.

The meeting is expected to be chaired by the deputy governor of RBI, S P Talwar. This is also a part of quarterly meeting which RBI holds with banks on supervision and compliance.

 

Sources said that banks entry into insurance would be the focus of the meeting as banks had reacted strongly to guidelines issued by RBI stating them as "to stringent". Many banks are likely to request the RBI revise the benchmark set on non-performing assets level and relax the minimum capital required norm and also allow banks to take higher than 30 per cent stake in the insurance company.

"On corporate government, bank are of the view that RBI may discuss high government's stake in light inability of banks to raise Tier-I issue by way of rights or fresh equity issue which could be aggressive debated among other things with RBI," said a banker.

Sources said, "As we move towards following practices of better It is also time for RBI to consider if there is a need to have their nominee in the bank's board."

In case of non-SLR securities, the RBI had set up a committee to review banks' investment in non-SLR securities and also suggested that such papers should be listed and rated.

"Heavy subscription is made by banks through the private placement market in the non-SLR securities and thus the RBI plan to discuss about it before formulating the final guidelines," said sources.

On asset-liability management, the RBI has made it mandatory for all banks to implement it by March 2000 even when few banks are far from implementing it in toto.