FSLRC’s recommendations are a serious blow to the independence of the Reserve Bank of India
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Monday, April 8, 2013
FSLRC’s monetary policy myopia
Subscribe to:
Post Comments (Atom)
1 comment:
The idea of creating a Unified Financial Agency for all financial regulators except RBI, truncating RBI by separating Public debt Management and keeping the agency doing that work (presumably with the same work force) in RBI premises, later UFA subsuming even RBI all give a feeling that the FSLRC was not allowed to ‘apply its intelligent mind’ and in the eagerness to satisfy all, and so fast, it has forgotten its own brief. Perhaps the purpose would be served better, if RBI is allowed to function with its present mandates, a coordination committee sorts out issues among the remaining regulators and if GOI aim is to reduce the number of regulators, merge with RBI, the agencies outside RBI one by one, as work stabilizes. The twin goals of one Unified Financial Agency and managing the man-power-related issued mentioned here would be better achieved this way.
Our finance ministry and FSLRC, in a hurry to resolve minor issues like occasional friction between or among officials holding top positions in different work areas in the financial sector, perhaps ignored the evolution of the role of Reserve Bank of India and the care with which RBI has nurtured the financial sector concurrently successfully safeguarding GOI interests even in several areas which do not come under traditional central banking functions. When found necessary, at the appropriate time, new institutions were built by RBI in association with GOI to transfer responsibilities which either conflicted with its core functions or became unwieldy or unmanageably heavy.
Time is not opportune for dismantling or truncating RBI which is doing creditably well as is being admitted in several international forums. Any regulatory changes should be to consolidate and restate the roles so far evolved and should not be a tool for Finance Ministry or any government department to usurp powers or responsibilities now with statutory regulators.
Post a Comment