The proposal to make Mumbai an international financial centre (IFC) is all set to gather momentum with the government asking the Reserve Bank of India (RBI) and Securities & Exchange Board of India (Sebi) to shortlist the first set of Percy Mistry Committee?s recommendations that can be implemented immediately.
A high-powered expert committee (HPEC), chaired by Percy Mistry, submitted a detailed report to the government on making Mumbai an IFC in February. At a recent meeting of a high-level committee on capital and financial markets, RBI too had suggested the need to expedite the HPEC report.
An official familiar with the issue said RBI and Sebi would submit their comments and suggestions on the report to the finance ministry soon and the government would consequently decide on what can be implemented. The committee has suggested a vast number of reforms along with a timeline.
Among a host of proposals, the report suggests elimination of securities transaction tax (STT) and stamp duties. It also recommended applying goods & services tax (GST) to the financial services industry, achieving the full capital account convertibility in 18-24 months, creating a bond-commodity-derivative (BCD) nexus and moving away from rules-based regulations towards principles based regulation. It has suggested 48 action points for making Mumbai an IFC.
Finance ministry officials said the central bank and the markets regulator would now deliberate on these proposals to submit their suggestions to the ministry. The government will decide on what would be done to the report only after RBI and Sebi put forth their views. Reforms on which government departments are in agreement are expected to be rolled out immediately.