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Date : Sep 01, 2006
Report of the Committee on Fuller CAC: RBI sets up Task Force
The Reserve Bank of India has today constituted an internal task force to re-examine the extant regulations and make recommendations to remove the operational impediments in the path of liberalisation already in place.

The Task Force will be convened by Shri Salim Gangadharan, CGM In-Charge, Foreign Exchange Department, Reserve Bank of India and will have the following terms of reference:

(a) Undertake a review of the extant regulations that straddle current and capital accounts, especially items in one account that have implication for the other account, and iron out inconsistencies in such regulations.

(b) Examine existing repatriation/surrender requirements in the context of current account convertibility and management of capital account.

(c) Identify areas where streamlining and simplification of procedure is possible and remove the operational impediments, especially in respect of the ease with which transactions at the level of authorized entities are conducted, so as to make liberalisation more meaningful.

(d) Ensure that guidelines and regulations are consistent with regulatory intent.

(e) Review the delegation of powers on foreign exchange regulations between Central Office and Regional offices of the RBI and inter alia, examine, selectively, the efficacy in the functioning of the delegation of powers by RBI to Authorised Dealers.

(f) Consider any other matter of relevance to the above.

The Task Force is empowered to devise its work procedure, constitute working groups in various areas, co-opt permanent/special invitees and meet various trade associations, representative bodies or individuals to facilitate its work. It will make recommendations on an ongoing basis to rectify the anomalies and remove operational impediments. The processes are expected to be completed by December 4, 2006.

The report submitted by the Committee on Fuller Capital Account Convertibility (Chairman, Shri S.S. Tarapore) has been placed on the RBI website today. The Committee had, while considering fuller capital account convertibility, incidentally observed that though the overall regime had undergone a significant degree of liberalisation, in practice, some regulations relating to an earlier period of tight controls continued to remain, giving rise to a disconnect between the regulatory intent and the procedure in use. It has, inter alia, recommended that a Reserve Bank of India task force should be set up immediately to identify the anomalies in the present regulatory framework for current and capital accounts and that rectification should be undertaken within a period of three months.

Alpana Killawala
Chief General Manager

Press Release : 2006-2007/321