In a specific instance, the in-principle approval given by the Reserve Bank to start a bank was used by the entity to mobilise huge funds from the unsuspecting public and the payable-at-par cheques issued by the entity on a leading commercial bank resulted in a huge exposure and default to the bank because of the lag between the timing of payments and providing funds cover.
The new challenges for the supervisory authority are best solved in close and binding cross-border cooperation, which is precisely what the strengthened banking cooperation is about. None of us know what tomorrow brings. But it is our duty to do our best to protect the fundamental financial functions of our society. Thank you. Page 7 of 7