• UGI USER
  • Jan 12, 2024
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RBI ASKS BOARD DIRECTOR TO BE MORE WATCHFUL

Why in the News?

  • Recently, RBI urges banks’ board of directors and risk executives to be more vigilant.
Source: Tribune India

About News

  • Governor Shaktikanta Das emphasizes the need to preemptively address potential risks.
  • Bad loans in Indian banks have reached 11% of advances.
  • RBI cautions against ignoring incipient risks.
  • Financial creditors’ claims should take precedence in bankrupt firms due to their higher risk-taking.
  • Amendments to the Insolvency and Bankruptcy Code should prioritize the interests of financial creditors.
  • RBI emphasizes strengthening institutions through prudential norms and heightened supervision.
  • Trust in the banking and financial system must be preserved.
  • Recent efforts to improve regulation and supervision are guided by safeguarding the Indian financial system’s trust factor.

The structure of the Reserve Bank of India (RBI) consists of the following components:

Central Board of Directors:

  • The central board of directors governs the affairs of the Reserve Bank.
  • This board is appointed by the Government of India in accordance with the Reserve Bank of India Act.
  • Directors are nominated/appointed for a four-year term.

Official Directors (Central Board of Directors):

  • Full-time: The central board includes the Governor and up to four Deputy Governors.
  • Currently, Shri Shaktikanta Das serves as the Governor of RBI.

Non-Official Directors:

  • Nominated by the Government: There are ten Directors chosen from various fields, along with two government officials.
  • Others: Additionally, there are four Directors representing the regional local boards.