Saturday, March 23, 2013

FSLRC gives the draft Indian Financial Code

The Financial Sector Legislative Reforms Commission closed its journey yesterday with the delivery of a report and the draft Indian Financial Code (IFC). Here is the report and here is the draft law. Here is commentary in the press on the subject:

The signing:

And a subset of the team that did it:

1. I am a layman to these. I go to my job from 9 am to 6 pm and spend my time with my family after that. My skills / expertise is not in area of finance and economics. It would be nice to understand the impact of these regulations for the regular person not with jargon but with a simple example. I am also trying to understand why a Cyprus style situation won't happen in India. Appreciate any input on this matter.

2. India has a lot of savings and a lot of investment needs. But the cost of getting the savings from households to businesses is very high in India. A large part of the high cost has to do with the myriad of regulations/restrcitions than have been imposed in an ad hoc manner over the last 80 years. Often these restrictions were imposed to take care of a specific problem at hand. But over time these had costly unitended consequences. By cleaning up the regulations and unifying them into a single framework the hope is that the cost of taking the savings from hosueholds to businesses will be reduced while at the same time ensuring the safety of the financial system.

Can unintended consequences occur even after the IFC is enacted. Sure. But at least we will have one Act to read through to figure out what went wrong and how rather than 60 odd Acts as now.

3. I will delete comments that misbehave! How do you define misbehave? You may call something a misbehave even if that sound little awkward to you to reply? I have seen people who at senior position as you are rude often and call anything misbehave, which questions their authority.

Please note: Comments are moderated. Only civilised conversation is permitted on this blog. Criticising me is perfectly okay; uncivilised language is not. I delete any comment which is spam, has personal attacks against anyone, or uses foul language. I delete any comment which does not contribute to the intellectual discussion about the blog article in question.

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