The Reserve Bank of India (RBI) on 4 August 2016 constituted a committee to look at various facets of household finance in India. The Committee will be chaired by Tarun Ramadorai, Professor of Financial Economics, University of Oxford.
It will have representation from financial sector regulators namely, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) apart from Reserve Bank of India (RBI).
Terms of reference of the Tarun Ramadorai Committee
• To benchmark the current depth of household financial markets in India among those in other major world markets and to identify areas of priority for growth and change.
• To characterize and evaluate Indian households' demands in formal financial markets (for assets such as pensions as well as liabilities such as home loans) over the coming decade.
• To consider whether, how and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour like the large household allocation to gold.
• To evaluate the design of new systems and the redesign of existing systems of incentives and regulations to encourage better participation by Indian households in formal financial markets.
• To assess the role of new financial technologies and products in the cost-effective provision of high-quality financial products to Indian households while containing risks.
• The Committee is expected to submit its report by end of July 2017.
The demand for formal financial market investment product like pension as well as liability product like home loan from the Indian household was discussed during the meeting of the Sub Committee of Financial Stability and Development Council (FSDC-SC) held on 26 April 2016.
It was decided during the meeting that a Committee should be set up to look at various facets of household finance in India and submit a report.
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What: Constituted by RBI
When: 4 August 2016