The banks are now required to set up audit committees to follow up on the reports of the statutory auditors and inspection by the RBI. Similarly, immediate action is warranted on reconciliation of inter branch accounts which, if left unreconciled, are fraught with grave risks.
Doing so would increase the volume of funds available for long-term investment, contribute to long-term sustainable growth, and increase the resilience of the corporate sector during periods of banking-sector stress. The development of a deep EU securitization market for corporate loans would provide capital relief to banks, improve risk sharing, and increase banks’ lending capacity.