Monday, 15 July 2024

Reserve Bank of India named Regulatory Institution of the Year in Asia Pacific 2016

5 min read

By Foo Boon Ping

Central banks in Philippines and Singapore also recognised for Best Macroeconomic Regulation and Best Systemic and Prudential Regulation respectively.

  • Reserve Bank of India recognised for bold and innovative measures to improving financial inclusion and addressing banking sector asset quality
  • Philippines’ Bangko Sentral cited for role in facilitating the country’s strong economic growth and low inflation
  • Singapore financial system stability and resilience attributed to the Monetary Authority of Singapore’s prudent supervision.

Hanoi, Vietnam – Three leading financial regulators in Asia Pacific were recognised for outstanding achievements in 2016. Reserve Bank of India (RBI) was named Regulatory Institution of the Year in Asia Pacific; Bangko Sentral ng Pilipinas (BSP) was named Best Macroeconomic Regulator in Asia Pacific; and Monetary Authority of Singapore (MAS) was named Best Systemic and Prudential Regulator in Asia Pacific.

The awards were presented during the prestigious The Asian Banker Summit 2016 by United States Congressman Barney Frank, former chairman of the US House Financial Services Committee. Also present were Nguyen Thi Hong, deputy governor of State Bank of Vietnam; and Cesar Virata, a member of the advisory council that decides on the award, and former prime minister of the Philippines.

The Asian Banker cited the regulators for their notable performance in the year under review (2015). The BSP was cited for bringing the central bank a step closer to the realisation of a world-class monetary authority; and for being a catalyst for a globally competitive economy and financial system. The Asian Banker cited MAS for exemplary management of inflation and employment through effective use of monetary policies, currency, and other tools at its disposal. MAS was able to maintain its independence but also able to work in conjunction with other public and private institutions to respond effectively to economic challenges.

Reserve Bank of India—Regulatory Institution of the Year in Asia Pacific

The RBI has taken several innovative measures to protect consumers, ensure market integrity, and drive financial inclusion forward. It conducted its supervision and governance with a series of provisions covering commercial banks, financial institutions, and nonbank finance companies. A report of the committee on medium-term path on financial inclusion shows that banking penetration in rural and semi-urban areas has increased significantly.

RBI Governor Raghuram Rajan has set the deadline of March 2017 for banks to have clean and fully provisioned bank balance sheets. RBI has initiated provisioning for potential bad loans by identifying specific accounts and requiring lenders to classify these accounts as nonperforming.

To meet credit and remittance needs of small businesses, the unorganised sector, low-income households, farmers, and the migrant work force, India created in 2013 a framework for licensing small banks and other differentiated banks, particularly for infrastructure financing, wholesale banking, and retail banking.

Bangko Sentral ng Pilipinas—Best Macroeconomic Regulator in Asia Pacific

The Philippines’ gross domestic product grew by 5.8% in 2015, one of the strongest in the region. Easing petroleum prices and ample food supply also sufficiently contributed to the low and stable inflation rate of 1.4% during the year, the lowest since the BSP adopted the inflation targeting framework in 2002.

The services sector remains the biggest driver of output, while a stronger manufacturing industry provided a broader production base. On the expenditure side, growth came mainly from strong private spending, aided by the increase in employment, steady inflow of remittances from overseas Filipino workers (OFWs), as well as low and stable prices.

In 2015, the peso depreciated largely due to uncertainty over the timing and potential impact of the normalisation of interest rates in the US, as well as to concerns over the slowdown in the Chinese economy. Nonetheless, despite the depreciation pressures on the peso in 2015, the country’s robust inflows of foreign exchange from OFW remittances, business process outsourcing and tourism receipts, foreign direct investments, and ample level of international reserves provided support to the peso.

Monetary Authority of Singapore—Best Systemic and Prudential Regulator in Asia Pacific

MAS conducts periodic stress tests on banks and insurance companies in Singapore to assess these financial institutions’ ability to withstand adverse financial and economic shocks; and to evaluate their potential impact on Singapore’s financial stability.

Under MAS’ continuous efforts, Singapore has already published rules covering capital conservation buffer, countercyclical buffer, LCR disclosure requirements, G-SIB requirements, and D-SIB requirements. In October 2015, Pillar 3 disclosure requirements were drafted and the final rule is expected to be published in 2016.

Banks in Singapore are not only well managed by the MAS, but also have a strong corporate governance framework and strict adherence to international accounting standards, which gives them a strong balance sheet as well. 

About 1,000 delegates attended the awarding ceremony, consisting of industry specialists, senior bankers, regulators, service providers, and decision makers from leading institutions in Asia, the United States, Europe, and Latin America, where opinions and responses of practitioners to global issues are shaped.

The Asian Banker Regulation & Supervision Awards is a programme designed to determine and award best practices and outstanding achievements of leading financial regulators in the Asia Pacific region. A stringent three-month evaluation process based on a balanced and transparent scorecard had been used to determine the winners.

The full list of winners of the Regulation and Supervisory Awards includes: 

  • The Regulatory Institution of the Year in Asia Pacific – Reserve Bank of India
  • The Best Macroeconomic Regulator in Asia Pacific – Bangko Sentral ng Pilipinas
  • The Best Systemic and Prudential Regulator in Asia Pacific – Monetary Authority of Singapore

Keywords: RBI, BSP, MAS, TAB Summit
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