A high level committee--comprising RBI officials led by deputy governor YV Reddy, CAG representatives and PSU officials--will submit a report to finance secretary Montek Singh Ahluwalia by the weekend, sources familiar with the report said.

Sources said that the high-powered panel--set up at the behest of the finance ministry--is of the opinion that PSUs should be allowed to undertake better risk management as far as spot rupee and their cross-currency positions are concerned. "It has suggested ways to hedge in the spot market and take cross currency positions," a senior official familiar with the committees recommendations said.

Sources said that the committee has also recommended a number of measures which impart bettor management of rupeeresources by PSUs like SAIL, IOC, ONGC and MTNL.

The committee had been set up by the finance ministry to devise ways to minimise losses by PSUs in their treasury operations.

Officials familiar with the report admitted that CAG will have to evaluate its own parameters of audit so that more freedom is given to the PSUs to take better decisions on how to manage risks -- both forex and rupee. "CAG, being the custodian of the government, will naturally have a major role to play. But an evolution of the key audit parameters has to take place so that PSUs can function within the new framework that has been recommended," a source said.

Officials connected with the report further disclosed that the CAG -- which had a representative in the committee -- has agreed that it may have bring about changes to herald the new risk management framework.

PSU officials apprehend that although they may not have any problem in implementing the new framework for better risk management CAG can pull them up if decisions takengo awry. "We have a problem there and it has to be solved," a treasury official in a leading public sector company active in the forex market said.

"If the CAG finds that genuine business decisions have lead to losses and they pull us up, we will be afraid to take decisions," he added.