RBI sets up committee on financial benchmarks

The Reserve Bank has set up a committee to review the relevance of existing financial benchmarks and suggest new ones to improve regulation of the sector. The Committee, to be headed by RBI ED Vijaya Bhaskar, will also look into the international practices and draw suitable lessons from them to implement them in Indian context.  Financial benchmarks include repo rate, reverse repo rate, bank rate, Marginal Standing Facility Rate. The committee, RBI said, will “study all major financial benchmarks in India with a view to assessing their current relevance/usage, fallback mechanisms in place in the event of benchmark being rendered obsolete, and suggest changes, if any, for inclusion of new benchmarks or exclusion of some of the existing benchmarks”.  The committee, whose members would include people from academia and other officers from RBI, would submit its report by December 31, 2013.