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Diplomazia Economica/Sole 24 Ore – India: Rajan promises stability and open banking system

The new governor of India’s Central Bank, highly respected former IMF chief economist Raghuram Rajan, made a press announcement outlining an ambitious agenda for the next three years, which calls for a broad mandate (at least the intention of one) limited not only to maintaining prices. He indicated two main priorities:

– preservation of the power acquired by the national currency and financial stability;

– liberalisation of the banking system to foster inclusive growth and development.

He then announced the immediate formation of a panel of experts to identify he most effective solutions to counteract inflation.

With regard to the limited access of the population and small and medium sized businesses to credit, the governor also announced a series of banking system reforms aimed at increasing the country’s “financial inclusiveness”. The intention is to issue new banking licenses as of January 2014. And to increase the circulation of capital, Rajan is also planning to gradually review the obligation of banks to acquire State bonds. He also expressed his intention to encourage foreign banks to open branches in India. Read more, in Italian.

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