Citing recent instances of their proposals creating unease in the industry and decisions getting overruled or withdrawn, Former Reserve Bank of India Deputy Governor S S Mundra on Friday called for an 'introspection' among financial regulators.
The career central banker, who served as the Deputy Governor of the RBI for three years ending 2017, cited recent instances involving both the RBI and Securities And Exchange Board Of India.
"There is a little bit which is there, for which regulators also need to introspect," Mundra said, while speaking at an event organised by industry lobby grouping Assocham here.
He mentioned that the Reserve Bank has had to roll back the regulations on alternative investment fund investments for banks after an uproar in the industry and it is also grappling with concerns raised by the industry over its proposals on higher provisioning for project finance.
Without mentioning the exact instances, Mundra also said the apex court of the land has had to intervene by asking regulators to review their actions in the last two years.
In the case of capital markets regulator SEBI, Mundra said almost 90% of the orders are overruled by the appellate authorities.
Mundra, who now serves as director on some companies, conceded that industry players also have to introspect various aspects, including regulatory expectations.
To avoid bigger grief in future, the industry needs to be sensitive about data privacy, avoiding evergreening of loans, risk concentration and pricing, information and cyber security, suspicious transactions, KYC, interconnectedness in the system, ensure that there are no hidden charges and follow high governance standards, he said.
They also need to focus on digital transformation, reforms in various areas, infrastructure led growth, vocational skills, sustainability, innovation and research and inclusive growth, he added.
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