Indian Financial Code’s Revised Draft:Critique of Two Proposals

The Revised Draft of the Indian Financial Code’s proposal to establish a Monetary Policy Committee with a majority of government nominees and no veto power to the Reserve Bank of India Governor have attracted a lot of attention. However, the code has some other critical proposals, including a Financial Stability and Development Council (the super-regulator for systemic risk) that will radically alter the financial regulation landscape of India. This article scrutinises two important proposals—the Financial Development Council and systemic risk regulation, and the “prompt corrective action” regime.