Backing the central bank’s case for autonomy, the International Monetary Fund said it would be beneficial to remove certain provisions in the existing laws to ensure independence of the Reserve Bank of India.In its financial sector assessment programme for the country, the Fund pointed out that the independence of the RBI is not enshrined in the law and there are some legal provisions that could seriously undermine its independence from the Government.“Legal provisions in the Banking Regulation Law and the Reserve Bank of India Act allow the Central Government to give directions to the RBI, to require it to perform inspections, to overrule decisions and to supersede the RBI Board.
Source: The Hindu Business Line
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