Policy on fair practices in next fiscal, says Reddy

The Reserve Bank of India (RBI) is planing to come up with a transparent policy in the next fiscal year to deal with demat accounts and fair banking practices.

"After the policy comes into effect, if RBI takes any action against any bank for non-compliance of regulations, it will be made public," RBI Governor Y V Reddy said in Pune today.

Reddy, who is also the chairman of the National Institute of Bank Management (NIBM), was here on the occasion of the 36th Annual day of NIBM.

Speaking to the press after the ceremony, he said, "The outlook on the economy for this fiscal is satisfactory. In the next fiscal we are looking for some instrument which will be compliant with the international banking system. We have to wait another three weeks to get the exact picture of inflation. Under the new policy, any action imposed on any bank will first undergo a CBI review and based on the CBI report we will put the matter before public."

In his address Reddy said that the regulatory and supervisory skills for the banking sector are becoming more complex.

"In the near future, we have to give a thrust on rural credit. One thing we have observed that when there is a government-sponsored banking programme, the non-performing assets (NPAs) are higher than 10 per cent. We are seeking an independent model for banking system. I thus request NIBM to help RBI to introduce Financial Inclusion which is going to be a viable business model in future," he said.