Rbi Offered Bis Membership

At the meeting of the BIS board of directors held yesterday in Basle, the RBI was formally invited to become a member along with eight other central banks.

In a statement issued to the press, RBI governor C Rangarajan said the formal accession to the membership of BIS will take place on completion of formalities.

The central bank added in the official release that the invitation to become a member of BIS was in recognition of India's growing economic strength and the RBI's growing role in the worldwide cooperation of central banks. The RBI sees the BIS membership leading to voting rights apart from closer cooperation with other central banks.

A senior banker of a nationalised bank said the central bank will now be able to voice the Indian banking industry's concerns at international forums. He also said the RBI will now be able to play a role in key decisions on international disputes and would have a say in the norms to be formulated.

India is already following the capital adequacy norms laid down at Basle. The BIS membership is also seen leading to better inflow and outflow on the foreign investment front, the banker said.

Talking to Business Standard on India's accession to the exclusive club of central bankers, RBI governor C Rangarajan said, "I have personally worked for it over the past two years. I was even asked to address the governors. Earlier, India was only invited to the annual meet."

Rangarajan said the monthly meetings of the BIS will provide an "intimate" forum to interact with counterparts across the world. "The forum certainly provides us an opportunity of resolving issues. Since this will not be addressed within the forum, it will have to be taken up in one-to-one sessions," the governor said.

The BIS, which commenced its operations in Basle in 1930, is structured as a limited company and is governed by international law. It enjoys the privileges and immunities necessary for the performance of its functions.