'Govt to take final view on Financial Code after consultation'

The government will consult stakeholders including the Reserve Bank before firming its views on a draft bill that seeks to limit the central bank's authority in setting interest rates.
Finance Minister Arun Jaitley said the government will take a view on the revised draft of the Indian Financial Code -- which favours creation of an interest rate-setting panel where a majority (out of its 7 members) is nominated by government -- only after receiving comments from stakeholders.
The Chief Economic Adviser Arvind Subramanian has already dubbed the IFC draft as merely a FSLRC report, not reflecting government views.
"FSLRC has made its recommendations, which have been made public for comments. After the comments are received, it is only then that the government will take a view," Jaitley told reporters here.

Known as the Indian Financial Code, the draft bill, on which comments are due by August 8, is meant to unify various laws that govern the country's financial markets.
According to the revised draft, the monetary policy committee is to consist of seven members -- three from RBI and four nominated by the government -- with the Reserve Bank of India's governor holding the deciding vote in case of a tie.

While the earlier version of the code gave RBI Governor veto power over panel's decision, the revised draft does not confer any such powers on him.
Minister of State for Finance Jayant Sinha said the government will take a decision after "considering its (RBI's) views".

RBI Governor Raghuram Rajan had met Prime Minister Narendra Modi on Friday and one of the items discussed at the meeting included the revised FSLRC code.
Later today, Sinha told ET Now that the issue of veto powers of RBI Governor was "very much an open issue".