It plays a crucial role in sustaining confidence in the currency, in the smooth functioning of the payment system, and in safeguarding the transmission of monetary policy.
The need for a robust supervisory framework for monitoring the risk levels in banks’ operations has been duly recognized by financial sector policy makers across the globe, more so in the wake of the Financial Crisis. Accordingly, measures to strengthen supervisory oversight of banks have been at the core of the reform process that has been since set in motion.