Mumbai: The Reserve Bank on Wednesday said it will set up a separate Enforcement Department beginning next fiscal to deal with non-compliance of various regulations of the central bank.
“With a view to developing a sound framework and process for enforcement action, it has been decided to establish a separate Enforcement Department,” RBI said in a statement today while unveiling the policy where it left the benchmark rate unchanged at 6.25 per cent.
Necessary steps have been initiated in this regard and the new department will start functioning from April 1, it said.
RBI noted that regulation, surveillance and enforcement are three important facets of financial sector oversight mechanism. Regulations determine the framework in which financial entities function so that prudence, transparency, and comparability are ensured on the one hand and customer interests are protected on the other.
“Surveillance is the process through which adherence to the regulations is monitored. Enforcement deals with cases of non-compliance with regulations noticed either through the surveillance process or otherwise,” it said.
Currently, at the Reserve Bank, there is a clear demarcation of regulatory and surveillance functions, it added.