The government has proposed "drastic changes" in the rules framed to retune the composition of three committees of the RBI: Board for Financial Supervision, the Board for Payment and Settlement Systems and the Committee of the Central Board.
The bank will now be in a position to resume normal lending activity, including corporate lending, with tightened risk management framework.
The multi-crore fraud at the Gurgaon branch of Citibank has prompted the banking regulator to review existing norms for the portfolio management services (PMS) of banks.
The Centre's proposal to call for governance reform in the RBI could, however, take a back seat, a source privy to the development said.
After removing three PSBs - BoI, Mahabank and OBC from the framework, RBI, on Tuesday, took out three commercial banks - Allahabad, Corporation and Dhanlaxmi from the said list.
Given the pressure from India Inc and the banking fraternity, it is surmised that the portfolio rejig will take place before April.
If the new governor can think out of the box even as he signals that he can bat for the RBI cadre and respect its institutional memory, that will go a long way in getting out of the current impasse.
'His (Das) approach to work seems that of working as a team with ease in communication.'
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
Central banking is a science, not an art, Tamal Bandyopadhyay tells RBI Governor Shaktikanta Das.
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