Government Guidelines & Mandates for Indian Banking
The Indian banking infrastructure has grown significantly over the last decade with over 56,000 branches covering public sector banks (PSBs) and a mix of Indian private players, MNC (multinational) banks, and smaller regional players. The regulatory system, which is one of the strong points of the Indian banking industry, is governed by the Reserve Bank of India (RBI). Since the economic liberalization of the 1990s, the banking industry, which opened up to private players, has been significantly transformed, with rapidly evolving regulations, high competition, demanding customers, and technology adoption raising the bar of performance. RBI, in line with global trends, has introduced several regulations such as KYC (Know Your Customer), AML (Anti-Money Laundering), and Basel II. But Indian banks face unique challenges in adopting these; for example, KYC requires identity and address proof of the prospective applicant. Since India does not have a unique individual identifier (like the social security number in the U.S.), various other identifiers are allowed (passport, voter’s ID, driving license). There are cases where a customer may not have any of these documents; for example, a senior female citizen in a rural area. There is also the RBI imperative not to deny banking service to any customer category or individual. These conditions increase the operational overheads and costs of the banks, affect customer experience and also greater intervention on control side by RBI. Such situations call for flexibility to be built into process design and the underlying technology.
Contents
Executive SummaryIndian Banking Overview
Historical Perspective
Commercial Banks
Co-operative Banks
Reserve Bank Of India
Establishment
Central Board
Local Board
Financial Supervision
Regulation & Supervision of Payment Systems
Legal Framework
Main Functions- RBI
Organisational Structure- RBI
Retail Banking & Government Regulations
Retail Banking
KYC Norms/ALM Guidelines
Legislation & Regulations in India
Internal Controls & Structure in Banks
Roles & Responsibilities of Directors
Roles & Responsibilities of Staff
Roles & Responsibilities of Principal Officer
Customer Risk Categorisation
KYC Guidelines
Foreign Banks & Government Regulations
Foreign Banks Shareholding -
RBI’s Discussion Paper, August
Roadmap for Presence of Foreign Banks in India
Implications
Securitisation in India & Role of RBI
The Framework- What is Securitisation
Securitisation- Indian Preview
Market Participants
Regulatory Framework
Mode of Securitisation
Issues
SARFAESI ACT
Need for Asset Reconstruction Companies and Role of RBI
Basel Norms
What are Basel Norms?
Basel III Norms
Regulatory Framework – Basel Forms
Conclusion
Annexure
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