RBI turning up compliance heat on regulated entities

New Delhi, Mar 2: Compliance is taking the centre stage with 4x increase in RBI penalties on regulated entities (FY20-23), IIFL Securities said in a report.

Increasingly, these penalties are imposed for failure to follow the required processes, deficiencies in risk management practices, and protection of customer interests after the RBI increased oversight of non-bank entities in the last few years.

In the words of RBI Governor Shaktikanta Das, financial stability is a ‘public good’ that the central bank has achieved with great efforts, and it intends to preserve and strengthen the same, the report said.

Channel checks indicate that the RBI has increased frequency and depth of inspections, deputed on-site inspectors at major NBFCs for continuous supervision and developed risk-based supervisory framework, SPARC, enabling the RBI to take pre-emptive actions, the report said.