Finance minister allays RBI fears over `super regulator' plan

The setting up of the Financial Stability and Development Council as proposed in the Union Budget 2010-11 will not undermine the independence of the Reserve Bank of India, the financial sector regulator, finance minister Pranab Mukherjee said.

Addressing directors of the RBI during his customary annual meeting with the country's financial planners on Saturday, Mukherjee also underlined the imperative of reverting to the high GDP growth path.

The finance minister, while alluding to the resilient and fast paced recovery of the economy, referred to his recent Budget announcements as an endeavour to keep up this momentum of growth.

He said the emphasis is on meeting the three important challenges of quickly reverting back to high growth path, making development more inclusive and improving governance.

Spelling out the key lessons of the crisis, he stressed the need for proactive domestic oversight and regulation of financial markets and addressing transmission channels of contagion.

He said the country should follow a calibrated approach to capital account convertibility, adding that financial innovation should serve the objective of real sector development and promote financial stability.