New Delhi: The Reserve Bank of India (RBI) is to set up a separate Enforcement Department (EFD) proposed to be opened on April 3.
The initiative has been proposed to separate those who oversee the possible rule breaches and those who decide on punitive actions. It will hence, enable the enforcement process to operate fairly and based on evidence.
The EFD shall, inter alia, develop a broad policy for enforcement and initiate enforcement action against the Regulated Entities (REs) for violation consistent with such policy.
EFD would serve as a centralized department to deal with banks only for enforcement action.
This was stated by Minister of State in the Ministry of Finance Santosh Kumar Gangwar, in written reply to a question in the Lok Sabha today.
Currently for banks, the RBI has two departments, regulation and supervision.
Now with the third department of Enforcement, it will look after the issue of any violation by banks and impose penalty or issue warning.