Challenges in the Compliance of Regulatory Framework in Commercial Banks in Kerala

Banking regulations can generally be defined as the frameworks controlling the creation, operation and liquidation of banks in an economy. Since the banking industry in a country is considered as the nerve system of all economic development in the country, strict regulation and supervision is necessary. The Reserve Bank of India (RBI) is the primary regulatory body for all banks in India. In order to strengthen the banking system the RBI introduced several rules, laws and guidelines from time to time. The banks in India have to comply with all these guidelines as per RBI directions. Even though the regulations are meant for strengthening the banking system, but while adopting these regulations the banks might face many challenges and issues such as issues related to NPA and NPA recovery, work burden of the employees, cost of compliance, implementation issues and so on. In this research paper, the challenges in the compliance of regulatory and supervisory framework is analyzed based on regulations such as credit policy regulations, Basel norms, CRR, SLR, priority sector lending, AML and KYC.