FSLRC's recommendations schizophrenic: Raghuram Rajan

Jun 17 2014, 16:00 IST
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Rajan was talking about reforms suggested by the Financial Sector Legislative Reforms Commission (FSLRC). Rajan was talking about reforms suggested by the Financial Sector Legislative Reforms Commission (FSLRC).
SummaryRaghuram Rajan said shifting regulation of bond trading from RBI to have adverse impact.

seems to be inconsistent in its emphasis on synergies and regulatory uniformity.

"It proposes all regulation of trading should move under one roof, all regulation of consumer protection should move under another roof, but the regulation of credit should be balkanised Ė banks should continue to be regulated by the RBI but the regulation of the quasi-bank NBFCs should move to the Unified Financial Agency, a regulatory behemoth that would combine supervision of trading as well as credit," he said.

This balkanisation would hamper regulatory uniformity, supervision of credit growth and the conduct of monetary policy, he added.

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