Finally, enhanced supervision of systemically important banks includes higher supervisory expectations for risk management functions, risk governance, and internal controls. Additional policies aim at making derivatives markets safer and more transparent. They include requirements on trade reporting, central clearing, platform trading, margins and higher capital requirements for non-centrally cleared derivatives. Their broader aim is to mitigate systemic risk, contagion, and to avoid market abuse.
To support the economic growth as envisaged in the 12th Five Year Plan, the banking business needs to expand significantly to an estimated 288 trillion by 2020 from about 115 trillion in 2012 3. Given this, there is a need for reorienting the banking structure to make it more dynamic and flexible, while ensuring safety and systemic stability.