Plans to strip RBI's powers to regulate govt bonds

NEW DELHI (Reuters) - The government plans to take away the Reserve Bank of India's regulatory powers over government bonds, but leave the central bank in charge of other money market instruments, three government sources with direct knowledge of the matter said.

The move is part of a major overhaul of the country's financial system that aims to deepen its bond markets by increasing the participation of retail investors and improve monetary transmission, the sources told Reuters on Wednesday.

(Reporting by Rajesh Kumar Singh and Manoj Kumar; Editing by Frank Jack Daniel)