RBI to study SEBI proposal on banks’ foray into non-Agri derivatives: Governor

Reserve Bank of India Governor Sanjay Malhotra on Friday said that the central bank will study the pros and cons of the markets regulator Securities and Exchange Board of India’s (SEBI) proposal that observed that the banks be allowed to foray into non-agricultural derivatives.

- TBG NETWORK

At the post monetary policy meeting press conference, the RBI Governor confirmed that the proposal has come to them just recently.

He also indicated that the Banking Regulation Act may need to be amended for making way for such arrangements for banks.

"That proposal has just recently come to us. We will study that.

Under Banking Regulation Act, banks are not allowed to partake in such product/asset class at present. So the current Act may need amendment(s)," the RBI Governor said, responding to a question.

"This issue is not just limited to regulatory aspect. In the past also there had been similar proposal, and it was studied and being concluded that it is not appropriate. Have things changed in the past 8-9 years? We will study that. It will be incorrect on the part of me to give you a firm response without studying the pros and cons of it," he added, speaking in Hindi.