The Reserve Bank of India has formed a high power committee headed by the governor for integrated market surveillance and alert systems. This is to strengthen market supervision and monitoring.

According to sources, three sub-committees have been formed with recommendatory authority to report to the higher level. Each sub-committee will represent a different segment of market participation.

There will be an RBI committee with members from central banks, a committee of the Securities and Exchange Board of India and committee of the Insurance Regulatory and Development Authority.

The high-power committee will also have members from insurance, capital markets and financial. This follows the recommendation made in the last monetary and credit policy to have a special reporting system for systemically important financial intermediaries.

The committee has been meeting regularly and one of the issues where joint review took place was imbalances in the capital markets where volumes in derivatives far outweighed the cash market.

Further, agenda for the committee relates to not only reporting of intra-group transactions of SIFIs but also for exchange of relevant information among Irda, Sebi and RBI

A number of steps have been taken by the RBI for stringent market surveillance, including pilot implementation of risk-based supervision in select banks.

Secondly, consolidated prudential reports have been introduced on a half-yearly basis and input module for off site monitoring system has been suitably modified.

Thirdly, a computerised fraud reporting and monitoring system has been has been introduced. Moreover, all public sector banks have been advised to prepare quarterly review of accounts.

Besides, the central bank has initiated the process of preparing banks to adopt the new Basel Capital Accord.

In this regard, seven banks participated in the quantitative impact study, conducted by the Basel Committee on banking supervision.