The government recently proposed to amend the RBI Act to take away money market regulatory powers from RBI and bring it under the purview of SEBI
The government plans to strip the Reserve Bank of India (RBI) of its powers to regulate government bonds, according to a media report.
The objective is to push financial sector reforms that aim to deepen bond markets by increasing the participation of retail investors, the report further said.
The government recently proposed to amend the Reserve Bank of India (RBI) Act to take away money market regulatory powers from RBI and bring it under the purview of SEBI.
The Finance Bill seeks amends in Sections 45U and 45W of the RBI Act to enable the shift of powers from RBI to SEBI. The proposed amendment to section 45W says: "Any direction issued by the Reserve Bank, in respect of security, under chapter III D of the RBI Act, shall stand repealed." This means that the RBI will cease to regulate government bonds and other money market instruments. These powers were given to the central bank after amending the RBI Act in 2005-06, to enable it better ensure financial stability.
Both these proposals are part of the Financial Sector Legislative Reforms Commission prepared by Justice BN Srikrishna and submitted in March 2013.
The government plans to strip the Reserve Bank of India (RBI) of its powers to regulate government bonds, according to a media report.The objective is to push financial sector reforms that aim to deepen bond markets by increasing the participation of retail investors, the report further said.
The government recently proposed to amend the Reserve Bank of India (RBI) Act to take away money market regulatory powers from RBI and bring it under the purview of SEBI.
The Finance Bill seeks amends in Sections 45U and 45W of the RBI Act to enable the shift of powers from RBI to SEBI. The proposed amendment to section 45W says: "Any direction issued by the Reserve Bank, in respect of security, under chapter III D of the RBI Act, shall stand repealed." This means that the RBI will cease to regulate government bonds and other money market instruments. These powers were given to the central bank after amending the RBI Act in 2005-06, to enable it better ensure financial stability.
Both these proposals are part of the Financial Sector Legislative Reforms Commission prepared by Justice BN Srikrishna and submitted in March 2013.
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