Monday, July 20, 2009

A new perspective on how RBI might approach the DMO reform

In Mint today, Tamal Bandyopadhyay has an article Reserve Bank of India needs new clothes which has an original perspective on the establishment of the Debt Management Office:

If indeed the debt management function is taken away from RBI, I don't think it will be a big loser as now it manages some 25 functions and each can be independently run by an institution. In the past, at least five institutions have been carved out of RBI (NHB, Nabard, Exim Bank, Industrial Development Bank of India (the earlier avatar of IDBI Bank Ltd) and Unit Trust of India) and the debt office will be yet another such body.

RBI should not bother much about losing its debt management function, and instead focus on changing the organization to be in sync with the new global order.

Please note: LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.