FACTBOX - RBI governor Rajan's new proposals

MUMBAI (Reuters) - Reserve Bank of India Governor, Raghuram Rajan, on Wednesday announced a slew of proposals in his first day of office.

Below are some highlights of the proposed action.

MONETARY POLICY

Postpones first monetary policy statement as Governor to September 20 from September 16

To set up a panel on how to strengthen monetary policy framework, which will submit report in three months

RUPEE, CAPITAL INFLOWS

To allow exporters to re-book cancelled forward currency contracts up to 50 pct of the value of cancelled contracts and up to 25 percent for importers

Will push for more trade settlements in rupees, open up financial markets for those who receive rupees to invest back in

Will offer a special window for swapping foreign currency non-resident (FCNR) deposits with a minimum tenor three of years and more, at a fixed rate of 3.5 percent per year

Will raise overseas borrowing limit of 50 percent of unimpaired Tier I capital to 100 per cent for banks

Borrowings mobilized under this provision can be swapped with RBI at a concessional rate of 100 basis points below the ongoing swap rate prevailing in the market

Above schemes will be open till November 30, 2013

DEBT / BROADER MARKETS

Will introduce cash-settled 10-year interest rate future contracts

Will examine introduction of interest rate futures on overnight interest rates

Will steadily but surely liberalise markets, restrictions on investments and position-taking

To issue inflation-indexed savings certificates tied to CPI to retail investors by end November

Need to reduce requirement for banks to invest in government securities in a calibrated way

BANKING SYSTEM

To set up external committee to screen bank license applicants

Hopes to announce licenses within, or soon after, January 2014

Will push foreign banks to set up wholly-owned subsidiaries

Will look at continuous or on-tap bank licensing system for applicants

Will issue guidelines to free rules on setting up bank branches for domestic commercial banks

To look at rising non-performing assets and restructuring/recovery process

Need to accelerate the working of debt recovery tribunals and asset resconstruction companies

Proposes to collect credit data, examine large common exposures among banks

Will encourage banks to clean up their balance sheets.

Will encourage banks to commit to raising capital when necessary

Bad loan problem is not alarming yet, but will fester if unaddressed

To set up committee that will access every aspect to financial inclusion

(Compiled by Subhadip Sircar; Editing by Rafael Nam)