Moody's flays revised draft on IFC

Says it will undermine RBI's independence and politicise the monetary stance

Moody's Analytics on Thursday flayed the revised draft on the Indian Financial Code (IFC), which had suggested a majority for government nominees in the proposed monetary policy committee, saying this would undermine the Reserve Bank of India (RBI)'s independence and politicise the monetary stance.

"A panel elected by the government undermines RBI's independence and it could severely dent RBI's competency," the research and analysis firm of Moody's group said.

It added this change could lower credibility as politics would drive monetary policy.