RBI could have gone for higher risk provisioning, says Rakesh Mohan

This year's surplus was higher than usual and therefore, a large transfer in any case was going to happen, says Mohan

Rakesh Mohan, former deputy governor of the Reserve Bank of India (RBI) and vice-chairman of the Bimal Jalan committee that examined the central bank’s economic capital framework, tells Somesh Jha in a telephonic interview from the US that the earlier framework was a bit too stringent. He talks about the challenges faced by the panel in finalising its recommendations, among other issues. Edited excerpts:

How do you see the implementation of the Bimal Jalan committee’s recommendations by the RBI board?

The RBI board has fully accepted the recommendation that revaluation reserves cannot be distributed, which was a key area of contention last