The Board of Financial Supervision (BFS):
1. is headed by RBI Governor
2. advises the Reserve Bank of India in area of banking regulation
3. supervises the banks as well as non-banking finance companies
Which among the above is / are correct statements?
Board of Financial Supervision (BFS) is one of the two assistive bodies for Central Board of Directors of RBI, other being Board for Payment
and Settlement Systems .
It was established in 1994 and its main function is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies. It is chaired by RBI Governor. One of the deputy governors of RBI serves as Vice Chairman BFS. BFS meets typically every month.
Functions of BFS
BFS is working as the main guiding force behind RBI’s regulatory and supervisory initiatives. The RBI carries out its functions related to financial supervision under the guidance of BFS. BFS Regulates and supervises commercial banks, Non-Banking Finance Companies (NBFCs), development finance institutions, urban co-operative banks and primary dealers.
Some typical functions are:
- Restructuring of the system of bank inspections
- Introduction of off-site surveillance,
- Strengthening of the role of statutory auditors and
- Strengthening of the internal defences of supervised institutions.
This question is a part of GKToday's Integrated IAS General Studies Module