According to Sri D. Subbarao, Governor, Reserve Bank of India, India must review the multiplicity of laws governing banks across different segments. The review was needed for greater transparency and providing a level-playing field for public and private sector banks and foreign lenders.
“The fact that different banks are governed by different laws has created an uneven playing field and that needs to be levelled to provide for fair competition,’’ he said at the annual Bancon conference today. “A single, harmonised legislation applicable to all banks will provide transparency, comprehensiveness and clarity.’’
The global financial crisis had highlighted the need for legislative action, he said. The issues in this regard included orderly resolution of failing banks and financial institutions, domestically and cross-border, home-host regulatory cooperation in information sharing, convergence of Indian Accounting Standards with International Financial Reporting Standards and empowering RBI on consolidated supervision, including that of financial conglomerates, he said.
Still, the plethora of laws had not held up the system’s orderly functioning, Subbarao said.
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