JOIN USThe Reserve Bank of India (RBI) has set up a committee to look at the various facets of household finance in India and to benchmark India’s position vis-a-vis both the peer countries and advanced countries.
The committee will benchmark the current depth of household financial markets in India vis-a-vis those in other major world and identify areas of priority for growth and change. The committee will also characterise 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, according to RBI.
The committee will also consider whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour and 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, the RBI said.
The committee is also expected to assess the role of new financial technologies and products including robo-advising, automatically refinancing mortgages in the cost-effective provision of high-quality and suitable financial products to Indian households while containing risks, the RBI said.
The committee will be chaired by Tarun Ramadorai, professor of Financial Economics, University of Oxford, and will have representation from financial sector regulators, namely, Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) apart from RBI, and is expected to submit its report by end-July 2017, the apex bank added.
The Sub Committee of Financial Stability and Development Council (FSDC-SC), in its meeting held on April 26, 2016, had discussed the demand for formal financial market investment product like pension as well as liability product like home loan from the Indian household.