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It is in the interest of the government and the nation to respect RBI’s functional autonomy, as happened at the last RBI board meeting. RBI autonomy came up when RBI governor Urjit Patel testified before Parliament’s standing committee on finance. It is important for all stakeholders to view and appreciate institutional autonomy in the right spirit. When the financial crisis struck in 2008, central bank autonomy, whether statutory or traditional, did not come in the way of governments, central banks and regulators of companies, insurance and stock markets working together to bail out banks, insurers and large companies, in several mature economies. Even when crisis is absent, the interconnected global economy, with its ability to send trillions of dollars of liquidity sloshing this unpredictable way or that, makes constant consultation and cooperation among the multiple nodes of fiscal and regulatory decision-making essential.  India has a partially open capital account, and large

The government is considering a databank for all medicine brands to prevent pharmaceutical companies from using the same or similar looking and sounding brand names for drugs, especially those used to treat different conditions, senior officials close to the development said.  The Drugs Technical Advisory Board (DTAB), the country’s highest drug advisory body, will discuss a mechanism to this effect at its meeting on Thursday because the problem is extensive and spread across the country, they told ET. A 2013 study published in the Indian Journal of Clinical Practice had found that more than 10,000 medicine brands in India were either similar looking or similar sounding.  What is even more alarming, an industry insider said, is that in some instances, the same brand name has even been used to market formulations used to treat different conditions altogether. For instance, the brand ‘Medzole’ has been used to market at least four different kinds of medications, including an antifung

India ’s economic growth will slow down somewhat but remain robust, at close to 7.50% in 2019 and 2020, the Organisation for Economic Cooperation and Development (OECD) has said. India’s gross domestic product (GDP) grew 6.7% in 2017-18. OECD projects GDP at market prices to grow 7.3% in 2019 and 7.4% in 2020 from 7.5% in 2018. “Economic growth will slow somewhat but remain robust, at close to 7.5% in 2019 and 2020,” the Paris-based organisation said for India in its 2018 Economic Outlook. Tighter financial conditions, higher oil prices, adverse terms of trade, lower growth in partner countries, and rising political uncertainties in India and abroad will tend to reduce growth, it said. The Reserve Bank of India expects FY19 growth at 7.4%. Global credit rating agency Moody's Investors Service has projected India’s economic growth to moderate to 7.3% in 2019 and 2020 as higher oil prices combined with rupee depreciation and monetary tightening dampen domestic demand. OECD said t

Bats for development of multi-disciplinary practice firms; law firms oppose proposal An expert panel constituted by the ministry of corporate affairs (MCA) has recommended that Advocates Act be amended to allow audit firms to offer legal services, a proposal which is being opposed by law firms.The MCA panel, which was set up to look into the regulation of audit firms and their networks, is of the view that development of multi-disciplinary practice (MDP) firms should be facilitated in the country, and to meet this goal, auditors should be allowed to expand their portfolio of services. “For Indian firms to evolve into global leaders in auditing, legal, consultancy, and ancillary services, it is necessary to rationalise the Advocate Act 1961 to facilitate development of Indian audit firms as well as legal firms,” stated the panel’s report. The report states that in 2015, the Society of Indian Law Firms had complained to the Delhi Bar Council against the ‘Big 4’ — PwC, Deloitte, KPM

Sparks are set to fly at the Reserve Bank of India board meeting on Monday as the government and the regulator may clash over necessity for a special liquidity window for non-banking finance companies (NBFCs), although the two are likely to step back from the brink on other issues, said three people familiar with the matter.  Worried about NBFCs having frozen lending due to fears of a liquidity crunch, the government is determined to break the logjam that’s causing a credit squeeze for micro, small and medium enterprises (MSMEs), which employ millions, said the people. “Housing sales have almost stalled,” said one of them. “First, bank credit was denied, and now NBFCs have also stopped.” The 18-member board headed by governor Urjit Patel will meet in Mumbai to debate numerous issues, including the current liquidity position, easing of lending norms for banks under the Reserve Bank’s prompt corrective action, and the transfer of excess reserves to the government.  Relations have Det

RBI and government representatives are therefore likely to make presentations on some of these issues, highlighting the impact of these changes on the banking sector,” said one of the board members on condition of anonymity.  RBI’s central board currently has 18 members, including five full-time directors from the central bank. It has two government representatives, which include secretaries from the departments of economic affairs and financial services.  Lending hope to the idea of a deal are the comments made last week by Rashtriya Swayamsevak Sangh ideologue and RBI central board director S. Gurumurthy. “As my understanding goes, the government is only asking for a formulation of a policy as to how much reserve the central bank must have. Most central banks don’t have reserves of this kind at all, only RBI has these kinds of reserves,” he said on 15 November in an address at the Vivekananda International Foundation.  However, another person familiar with the developments in RBI

The Reserve Bank of India board meeting on November 19 may decide to set up a high-level committee to decide on its capital framework, among the key reasons for the conflict between the regulator and the Centre, said several people familiar with the matter, downplaying expectations of a showdown.  The possibility of the board giving any direction with regard to the actual transfer of RBI reserves to the government looks remote as the RBI Act does not permit this, they said. “The board can lay down rules but cannot decide on a case-to-case basis,” said former financial services secretary DK Mittal, adding that the rules regarding the quantum of reserves to be held had been decided by the board. “The board has to take a balanced stand now. Both the government and RBI should behave responsibly.” Mittal was a member of the board by virtue of his position. The reserves are meant for unforeseen contingencies, including depreciation in the value of securities, risks arising from exchang