...............Over a year ago, the then Governor, D. Subbarao, sought to protect the RBI’s turf. It is now Raghuram Rajan’s turn to shift the spotlight to what he considers to be ill-conceived recommendations. For instance, the enhanced role being given to ill-equipped and inexperienced appellate tribunals will undermine the role of regulators and paralyse the system. Underlying Governor Rajan’s strong words is the belief that an overhaul of the financial architecture as suggested by the Srikrishna Commission will have to be preceded by more deliberations, a point of view that will be appreciated by Finance Minister Arun Jaitley..........
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1 comment:
The dissenting notes recorded by 4 out of 7 members who signed the final report are well-argued documents, which inter alia plead the case for maintaining the basic features of RBI and assert the need for allowing the central bank to carry on with its present mandates. One wonders what motivated the FSLRC Chairman to finalize the report ignoring the difference of views expressed especially by K J Udeshi, P J Nayak and Y H Malegam. It would appear that the Commission did not get opportunity to understand the present relationship between the RBI and GOI. The regulatory apparatus plus legislations in financial sector in India are in working condition. It has to be admitted that till Dr Rajan’s emergence as an acceptable leader of the Indian financial sector, the FSLRC’s effort to re-invent the institutional structure of regulatory bodies had pushed the regulators and supervisors with the exception of RBI to a confused state, making intelligent debate difficult. M G Warrier, Mumbai
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