New RBI Governor announces steps to strengthen monetary policy

Posted on September 5, 2013 by sagarmedia

New RBI Governor Raghuram Rajan has announced the setting up of few committees to look into critical areas of functioning, like monetary policy and screening of applications for licences to open new bank branches. In his maiden press conference in Mumbai last evening, Rajan announced an external committee, under the chairmanship of former Governor Bimal Jalan, to screen applicants for new bank licences, from January next year. Mr.Rajan also announced a committee, headed by his deputy Urijit Patel, to strengthen the monetary policy framework. The panel will come up with suggestions in three months. On the personal banking front, Rajan announced a technical committee to examine the feasibility of using encrypted SMS-based fund transfer. He said, the Reserve Bank will introduce consumer price inflation-linked savings certificates by November to provide some cover to households. The Reserve Bank also announced a special window to swap foreign currency non-resident dollar funds. The bank also doubled the re-booking amount limit allowed to exporters on cancelled forward contracts to 50 per cent from 25 per cent. The central bank also extended the facility to importers, who are currently not allowed to re-book their cancelled forwards contracts.