In a written statement, the Centre has pointed out that the Reserve Bank of India (RBI) has enough authority to deal with any situation arising in any bank, including state run banks. In a written reply to the Parliament, the Finance Ministry has listed the powers that the central bank enjoys under the Banking Regulation Act, 1949. It has also listed powers that the RBI has with regard to nationalised banks and the State Bank of India (SBI), under the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 (Bank Nationalisation Acts) and the State Bank of India Act, 1955.
The ministry said, “Further, RBI maintains the central fraud registry and banks report all frauds, involving amount above Rs 1,00,000, to RBI. In addition, RBI's master directions on frauds lay out guidelines on categorisation, reporting and review of frauds, along with norms for consequent provisioning. Thus, powers of RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks, including public sector banks.”
The Central Bank has lately been demanding more powers to regulate state-run banks, while the government has maintained that the available powers are adequate. Both the entities have previously sparred over the direction of interest rates. The RBI, in its reply to a Parliamentary panel earlier this year, had said the banking regulation Act, 1949 is a legislation aimed at regulating and supervising banking companies. It said a banking company is defined in section 69(c) of that Act as “any company” which transacts the business of banking in India.
