Banks must be ready for fully convertible capital account: RBI Dy Governor

Under fully accessible route, foreigners can have full access to specified securities; Over time, entire G-sec would be eligible for non-resident investment, says T Rabi Shankar

Reserve Bank of India (RBI) deputy governor T Rabi Shankar on Thursday said the country and its banks must be prepared to meet challenges related to full capital account convertibility as foreign investors get full access to India’s debt market.

“The rate of change in capital convertibility will only increase …. With that comes the responsibility to ensure that such flows are managed effectively with the right combination of capital flow measures, macro-prudential measures and market intervention,” the deputy governor said in his keynote address at the fifth Foreign Exchange Dealers’ Association of India (FEDAI) annual day.

Under the fully