Q47) In a major revamp of the financial sector architecture, the finance ministry issued a fresh draft of the Indian Financial Code (IFC). Consider the following statements:
1) IFC envisages establishment of a financial regulatory architecture featuring seven agencies.
2) It proposed a monetary policy committee headed by the “chairperson” of the Reserve Bank of India to decide on key interest rates by a majority vote
3) According to IFC the central bank will function as the monetary authority, banking regulator and payment system regulator only
Which of the statement(s) given above is/are correct?
Q47) In a major revamp of the financial sector architecture, the finance ministry issued a fresh draft of the Indian Financial Code (IFC). Consider the following statements:
1) IFC envisages establishment of a financial regulatory architecture featuring seven agencies.
2) It proposed a monetary policy committee headed by the “chairperson” of the Reserve Bank of India to decide on key interest rates by a majority vote
3) According to IFC the central bank will function as the monetary authority, banking regulator and payment system regulator only
Which of the statement(s) given above is/are correct?
The correct option is D All of these
Ans:47)(d)Expl: The commission proposes a financial regulatory architecture featuring six agencies:
(a) Financial Authority;
(b) Reserve Bank of India;
(c) Financial Redress Agency;
(d) Resolution Corporation;
(e) Financial Stability and Development Council; and
(f) Public Debt Management Agency
(g) A financial sector appellate tribunal.
In a major revamp of the financial sector architecture, the finance ministry issued a fresh draft of the Indian Financial Code (IFC) that proposed a monetary policy committee headed by the “chairperson” of the Reserve Bank of India to decide on key interest rates by a majority vote.
“Inflation target for each financial year will be determined in terms of the consumer price index by the Central government in consultation with the Reserve Bank every three years,” said the revised draft of the IFC.
The RBI and the finance ministry have signed a monetary policy framework agreement earlier this year that would include targeting retail inflation for policy rates and an MPC is expected to be set up — possibly during the course of this year. At present, the RBI Governor consults a Technical Advisory Committee on policy rates but he can choose to take an independent decision. The revised code has also proposed that the Centre can nominate one representative to attend all the meetings of the MPC and take part in deliberations but will not have a casting vote.
All of these
Ans:47)(d)Expl: The commission proposes a financial regulatory architecture featuring six agencies:
(a) Financial Authority;
(b) Reserve Bank of India;
(c) Financial Redress Agency;
(d) Resolution Corporation;
(e) Financial Stability and Development Council; and
(f) Public Debt Management Agency
(g) A financial sector appellate tribunal.
In a major revamp of the financial sector architecture, the finance ministry issued a fresh draft of the Indian Financial Code (IFC) that proposed a monetary policy committee headed by the “chairperson” of the Reserve Bank of India to decide on key interest rates by a majority vote.
“Inflation target for each financial year will be determined in terms of the consumer price index by the Central government in consultation with the Reserve Bank every three years,” said the revised draft of the IFC.
The RBI and the finance ministry have signed a monetary policy framework agreement earlier this year that would include targeting retail inflation for policy rates and an MPC is expected to be set up — possibly during the course of this year. At present, the RBI Governor consults a Technical Advisory Committee on policy rates but he can choose to take an independent decision. The revised code has also proposed that the Centre can nominate one representative to attend all the meetings of the MPC and take part in deliberations but will not have a casting vote.
