Professor Tarun Ramadorai chairing the Reserve Bank of India (RBI) committee

Tarun Ramadorai, Professor of Financial Economics at Imperial College London, is currently chairing a committee that the Reserve Bank of India (RBI) has formally constituted, to analyse household financial markets in India, and to benchmark them against other major world markets to identify areas of priority for growth and change. The committee is an inter-regulatory committee, with representatives from all of the major financial regulatory organizations in India, including the pensions regulator (PFRDA), the insurance regulator (IRDAI), the RBI, and the capital markets regulator (SEBI).  The nodal agency for this committee is the RBI’s department of banking regulation.

The terms of reference of the RBI Committee are:

i) To benchmark the current depth of household financial markets in India vis-a-vis those in other major world markets and to identify areas of priority for growth and change.

ii) 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.

iii) To consider whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour (e.g., the large household allocation to gold).

iv) To evaluate the design of new systems and the redesign of existing systems of incentives and regulations to encourage and enable better participation by Indian households in formal financial markets.

v) To assess the role of new financial technologies and products (e.g., robo-advising, automatically refinancing mortgages) in the cost-effective provision of high-quality and suitable financial products to Indian households while containing risks.

The committee is currently consulting with a range of stakeholders prior to submitting its official report in July 2017.

The Brevan Howard Centre at Imperial College is delighted that one of Imperial’s faculty members is participating in this regulatory initiative, and will be supporting Prof. Ramadorai as he engages with policy in this important role.

Some press coverage about the announcement:
http://indianexpress.com/article/business/business-others/rbi-panel-to-study-household-finance/

http://www.business-standard.com/article/finance/rbi-sets-up-committee-to-look-at-household-finances-in-india-116080500035_1.html

http://economictimes.indiatimes.com/news/economy/policy/rbi-panel-to-benchmark-indias-household-finance-against-global-markets/articleshow/53541374.cms

http://www.livemint.com/Politics/hp1PgGM4CosjFhrQ1jRmoL/RBI-to-set-up-panel-to-study-status-of-household-finance.html

The report has now been published and can be found here.