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Monday, December 16, 2013
Pitching for limiting Reserve Bank of India functions
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2 comments:
FM’s hurry to go ahead with measures to implement FSLRC report, sans legislation, is understandable in the context of the political developments last week. The motive, namely to complete a pending agenda before a LS Election with unpredictable results, cannot be faulted.
Coming to the details, the observations
“It(RBI) is the monetary authority and it will be a regulator of banks, but all other functions I think should be revisited and we should ask ourselves whether RBI is the best authority to discharge those functions or is there any other authority in the system which can take over those functions or is it necessary to create a separate authority,”
and
“What the FSLRC says is that some functions of the RBI can be better done by the government and some functions can be entrusted to new bodies. I think it is a well-argued thought and well-reasoned thought,”
lack clarity and need further elucidation.
If RBI has failed as an institution, why FM is favoring revisiting only select functions RBI is mandated to do? If the FM’s perception is correct (fortunately it is wrong) the need of the hour is first reforming RBI, or examining the need for such a reform.
As regards FSLRC report, the implementation should follow due process of deliberation and legislation and proceeding with implementation hurriedly may end up in otherwise avoidable controversies much larger in magnitude than those surfaced after such bull-dosser approach in the cases of NPS and AADHAAR.
M G WARRIER, Thiruvananthapuram
The UPA government ruined the economy. They have also sown the seeds to kill the otherwise Sound Financial system of the country by appointing FSDC and FSLRC to take away the powers of RBI which has systematically and meticulously built up the Financial System against all odds and earned the well deserved recognition from all over the world to keep the financial system insulated from global financial crisis. If RBI 's powers are clipped further, one can see the collapse of the Financial system at the earliest and the damage cannot be easily repaired . Political agenda if allowed to overlook and supersede the economic agenda, the country can have only a very bleak future.The financial system particularly the banking system is very healthy strong and sound only because the Reserve Bank's approach to have a strong financial foundation keeping in view the growth of the economy and make it a super economy on par with other advanced economies.
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