GOVERNMENT intends to establish an oversight council to, among other issues, monitor risks in the country’s financial systems that could arise from abuse of depositors’ funds. According to a draft to the amendments of the Banking Act, the council, to be chaired by the Finance Minister would be referred to as the Financial Sector Oversight Council.
The proposed Bill to amend the Banking Act is expected to be tabled in Parliament soon.
It is proposed that the Finance Minister would have four deputies – the governor of the Reserve Bank, the chairperson of the Insurance and Pensions Commission, the chairperson of the Securities Commission and the chairperson of the Deposit Protection Corporation.
Analysts say the establishment of the oversight council was long overdue in light of the “weaknesses” in the country’s financial systems.
The proposed structure of the council and its composition is almost identical to the Financial Sector and Oversight Council, a United States federal government organisation, established by Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by President Barack Obama on July 21, 2010.
The Dodd-Frank Act provides the Council with broad authority to identify and monitor excessive risks to the US financial system arising from the distress or failure of large, interconnected bank holding companies or non-bank financial companies. The US council also monitors risks that could arise outside the financial system.
The draft also proposes that the central bank governor designate a financial public protector to resolve disputes between banking institutions and other financial institutions, on one hand, and customers, on the other.