The Lok Sabha Standing Committee on Finance will meet top officials of the Reserve Bank of India (RBI) on August 11 to discuss a range of banking sector issues, a senior RBI official said yesterday.
The meeting will examine the impact of recent international economic developments on the banking sector. The running group has sent a questionnaire to the Reserve Bank on the working of the banking sector, financial institutions, and non-banking finance companies (NBFCs), the official said. The Asian crisis which threatens to enter a third phase if the Japanese economy does not pull out of recession, could hit the Indian financial sector as international investors tend to club India with other emerging markets of the region, he said.
The official said these factors were being treated as causes for caution by authorities in the government and the apex bank. While India presently stands on a stronger wicket _ looking comparatively healthy in relation to the Pacific rim countries and other south Asian nations _ the official said a third phase of the crisis could hit the country which is only just beginning to see an improvement in domestic as well as foreign investor sentiment.
The issues likely to be taken up during the meeting include the second phase of banking reforms, an evaluation of the performance of banks so far, capital adequacy, credit delivery, and non performing loans. Another topic which will be discussed is the regulation of NBFCs. The government has sent indications to the RBI that it would like to have a separate organisation, under the purview of the apex bank, for regulation of NBFCs on the lines of the National Housing Bank (NHB) which currently looks after the housing finance sector.
