Mohan to head panel on financial sector

The government in consultation with the Reserve Bank of India (RBI) has decided to constitute a committee on financial sector assessment to analyse specific development and stability issues relevant to India.

The terms of reference of the committee, chaired by RBI Deputy Governor Rakesh Mohan, includes a comprehensive and objective assessment of the Indian financial sector, including its development efficiency, competitiveness and prudential aspects.

The other members of the committee are "� Ashok Jha, secretary (economic affairs) as co-chairman, Ashok Lahiri, chief economic adviser to the finance ministry and Madhusudan Prasad, joint secretary in the central government.

The committee will identify appropriate areas, techniques and methodologies outlined in the Handbook on Financial Sector Assessment released by the World Bank and International Monetary Fund in September 2005 and also in any other documents relevant in the Indian context.

India had been one of the earliest member countries participating voluntarily in the Financial Sector Assessment Programme (FSAP) initiated by the World Bank and International Monetary Fund in 1999, in the aftermath of the Asian financial crisis.

Following the initiation of the FSAP and their experience in the conduct of assessment by member countries, the two institutions had jointly brought out a comprehensive Handbook on Financial Sector Assessment.

The handbook is designed for use in financial sector assessment, whether conducted by country authorities themselves or by the World Bank and IMF teams.

It serves as an authoritative source on the objectives, analytical framework, and methodologies of financial sector assessment as well as a comprehensive reference book on the techniques of such assessments.

The Reserve Bank had previously released a synthesis report in May 2002 and a progress report in January 2005 in keeping with a comprehensive self assessment of various international financial standards and codes.

The committee can co-opt members depending upon the subject area of assessment under consideration and may also constitute technical/ advisory groups to study and report on specific areas of assessment.