In: Economics
A comparative analysis on banking sector regulations
and effectiveness between
Australia and India.
1.You should demonstrate your understanding of banking
sector regulatory bodies and
important regulations in the both countries (Australia and India) ,
and knowing the
updated literatures on the bank regulations.
2. You should describe how the regulatory bodies implement the
rules and enhance the
effectiveness of the rules by penalizing the misconducted
activities of the banks.
Example would be helpful.
3. You should compare and contrast the banking sector regulatory
systems between the
two countries by providing comments/critiques on the possible
advantages and
disadvantages of them.
4. You should give your suggestion to improve the banking sector
regulatory systems for
one country or two. In particular, how to enhance regulation to
mitigate possible risks
due to turmoil of work economy, COVID-19 pandemic, and the tense
between the
large countries in the world.
Indian banking sector
Banking sector regulatory body in India is RBI ( Reserve Bank of India ) .
RBI is responsible for managing the financial sector of India . It makes all the regulations that have to be followed by all the banks in India .
In india RBI penalizes banks for violating the rules and the regulations or for their misconducts .
Advantages of banking sector in India is that your money is generally secured when they are in banks because even if the there is a bank failure , you need not worry .
The disadvantages in the banking sector of India are low profits and very less capital base . Moreover as both government and RBI have control over banking sector it leads to disadvantage , mismanagement and interference.
.BANKING SECTOR IN AUSTRALIA
Banking sector regulatory bodies in Australia are :
APRA - Australian Prudential regulation Authority. It supervises all the financial institutions in Australia .
RBA -Reserve Bank of Australia . It sets the monetary policies .
ASIC - Australian securities and investments commission .
It looks upon the misconducts on the basis of market manipulation , misleading conduct . It is responsible for the proper conduct of the Market .
Royal Commission looks into the misconducts of the banking sector in Australia . It investigates properly and focuses on the thing that led to the poor conduct . Then according to the misconducts , banks have to pay fines sometimes. For example - Royal Commission has repeatedly given the reason of GREED for the misconduct of the banks .
Disadvantages of banking sector in Australia is basically there are many brokers in between banks and customers which lead to poor quality of bank system and lowers the customer trust .
IMPROVEMENTS THAT BANKING SECTOR CAN DO DURING COVID PERIOD -
Both the countries should do proper investigations and plan the required stable funding accordingly . Covid has impacted every country drastically and led to fall of economy .
Banks in the countries should provide more liquidity . They should assess all the scenario and then take steps .
As many businesses have shut down and had a negative effect . Banks should provide loans to the local business that would boost both the economy and the banking sector .
Banks should ease the interest rates .
Banks should meet the capital needs and financial needs .