Reserve Bank of India (RBI) has constituted Shadow Banking Implementation Group (SBIG) to undertake micro mapping of shadow banks to assess the risks posed by such entities to the formal financial sector. SBIG is chaired by RBI and constitutes of members from Ministry of Finance, Stock Exchange Board of India, Ministry of Agriculture and Cooperation, National Housing Bank, National Bank for Agriculture & Rural Development, Insurance Regulatory Development Authority, Ministry of Corporate Affairs, Registrar of Agriculture and Cooperatives.

Terms of Reference of SBIG are as follows:

1. As a first step, the Group will undertake an assessment of the position of compliance of the regulatory framework in the country vis-à-vis the Financial Stability Board policy guidelines;
2. The Group will then carry out gap, analysis to identify the reform measures that can be implemented and those where implementation may not be desirable given the specific domestic conditions;
3. Where it may not be desirable to initiate the reform measures, the Group will document the same setting out the reasons within an overall ‘comply of explain’ framework;
4. The Group will set out a roadmap indicating the timelines for implementation of the reform area concerned together with the regulatory/agency which will implement the reforms and the framework for monitoring;
5. The Group will also recommend whether publishing of a formal approach to implementation of reform measures, as being done by several jurisdictions for some of the reform areas, would be appropriate in the Indian context; and
6. Setting up a data repository for the shadow banking sector.

The Committee on Shadow Banking is in initial stages in an ongoing assessment process being monitored by Inter Regulatory Technical Group comprising of RBI, Securities and Exchange Board of India, Pension Fund Regulatory and Development Authority, Forward Markets Commission and Insurance Regulatory and Development Authority. The Committee will not submit its report to the Government.

This information was given by the Minister of State of Finance, Shri Jayant Sinha in written reply to a question in Lok Sabha .

Shadow banking regulation: coordinated micro-mapping and gap analysis to identify reforms and monitoring mechanisms. Constitution of a Shadow Banking Implementation Group (SBIG) to micro-map shadow banking entities and assess risks to the formal financial sector; the Group will assess domestic regulatory compliance against international guidance, identify gaps, recommend reform measures or document reasons for non-implementation within a comply-or-explain framework, set implementation timelines and responsible agencies, propose monitoring arrangements, consider publishing an implementation approach, and establish a data repository for the sector.