2016年-FSB全球金融稳定委员会_Peer_Review_of_India_86页_1mb

Peer Review of India Summary

Core Content

The Peer Review of India was conducted by the Financial Stability Board (FSB) in 2016, focusing on two critical areas: the macroprudential policy framework and the regulation and supervision of non-banking financial companies (NBFCs) and housing finance companies (HFCs). The review aimed to assess the progress made by India in implementing reforms and its alignment with international standards, particularly those recommended by the Financial Sector Assessment Program (FSAP) and the FSB.

Main Findings

Progress Made

• Macroprudential policy framework: Significant progress has been made in developing the framework, including enhanced interagency coordination, the use of stress tests and quantitative tools, and the establishment of the Financial Stability and Development Council (FSDC) and its sub-committee (FSDC-SC).
• Regulation of NBFCs and HFCs: Regulatory reforms have been implemented, including the streamlining of reporting, enhanced prudential requirements, and the introduction of tools like loan-to-value (LTV) ceilings for certain lending activities.
• Data collection: The Central Repository of Information on Large Credits (CRILC) and improved disclosure requirements have enhanced data availability, though gaps remain for smaller and unregulated entities.

Areas for Improvement

• Macroprudential policy: More explicit policy-setting processes, clearer boundaries between authorities, and a more activity-based and risk-sensitive framework are needed. A formal process for reviewing macroprudential policy stance should be established.
• Data and analysis: Data collection for smaller and unregulated entities is limited. Enhanced data coverage and integration with financial market information would improve the ability to monitor systemic risks.
• Risk assessments: Current risk assessments are limited in scope and depth. Comprehensive stress testing and analysis of systemic risks, especially for NBFCs and HFCs, are necessary to ensure financial stability.
• Communication: There is a need for more transparent and consistent communication of macroprudential policy decisions and their implications to market participants and the public.

Macroprudential Policy Framework

Institutional Arrangements

• There is no single authority explicitly responsible for macroprudential policy across the entire financial system.
• The RBI plays a leading role in macroprudential analysis, primarily due to its prudential mandate and technical expertise.
• The FSDC and FSDC-SC serve as forums for coordination, but policy implementation remains the responsibility of individual regulators.

Analysis and Data

• The RBI conducts stress tests on the banking system, but these are limited in scope and do not fully account for the interconnectedness with other financial institutions and markets.
• Corporate sector data is often delayed and inconsistent, affecting the ability to conduct timely financial stability assessments.
• Early Warning Indicators (EWIs) for NBFCs are being developed, and the NHB has introduced a supervisory rating system for HFCs.

Tools and Policy

• The RBI has a wide range of time-varying and structural tools for macroprudential purposes, including countercyclical capital buffers (CCyB).
• There is a lack of cost-benefit analysis for macroprudential measures, which is a common challenge among FSB members.
• The review emphasizes the need for a framework to assess the sustainability of financial deepening, especially in the context of corporate leverage and bank credit risks.

Communication

• While some information is kept confidential to avoid adverse market reactions, public communication can serve as a 'soft' tool for macroprudential policy.
• The current communication strategy lacks depth and integration, particularly in the Financial Stability Report (FSR), which should better reflect the policy context and implications.

Regulation and Supervision of NBFCs and HFCs

Regulatory Landscape

• NBFCs and HFCs are regulated by various authorities, including the RBI, NHB, SEBI, and the Ministry of Corporate Affairs (MCA).
• The FSDC-SC and SBIG have played a role in coordinating regulatory efforts and addressing systemic risks.

Key Steps Taken

• Revisions to NBFC regulations in 2014 improved reporting and prudential requirements, reducing regulatory arbitrage with banks.
• The NHB has enhanced off-site surveillance of HFCs, though stress testing is not currently conducted.
• LTV ceilings have been introduced for NBFCs and HFCs to mitigate risks in specific lending segments.

Areas for Improvement

• Data gaps exist for smaller NBFCs and unregulated entities, requiring more comprehensive data collection and analysis.
• Risk assessments for NBFCs and HFCs should be more integrated and include stress testing, especially for systemically important entities.
• Interconnectedness with financial conglomerates and mixed-activity groups needs to be analyzed in supervision and risk assessments.
• Regulatory perimeter for NBFCs and HFCs should be reviewed regularly to ensure it adapts to the evolving financial landscape.

Conclusion

The peer review highlights that while India has made substantial progress in developing its macroprudential framework and regulating NBFCs and HFCs, there are still areas that require improvement. These include enhancing data collection, improving risk analysis, ensuring policy coherence, and strengthening communication and transparency. The review underscores the importance of aligning these efforts with the broader goal of maintaining financial stability in an increasingly complex and interconnected financial system.