RBI May Ask Banks To Set Up Cells To Monitor Large-Value Credit Exposures

The Reserve Bank of India is likely to ask banks to set up dedicated cells for market intelligence and monitoring large credit exposures.

- K Ram Kumar

This is expected to address issues relating to large divergences observed in asset classification and provisioning in banks’ credit portfolios vis-à-vis RBI’s supervisory assessments and the rising incidence of frauds.

The central bank may also direct banks to leverage data analytics more to monitor credit exposures (funded and non-funded).

To manage the operational risks inherent in the functioning of banks, the RBI’s five-member expert committee on nonperforming assets and frauds, headed by YH Malegam (former member of the Central Board of Directors of the RBI), has made these recommendations.