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Jalan underlines coordination between market regulators and operators

Reserve Bank Governor, Dr Bimal Jalan has said that there was a need for greater coordination between various market regulators and operators to bring about greater transparency and accountability in line with international norms.

Inaugurating the Global India Conference organised in Bombay on Thursday by the All India Association of Industries, Dr Jalan said that India is lagging far behind in developing its long-term debt market as compared to international standards mainly because of lack of innovations and transparency in attracting individual investing public.

The country is passing through a critical phase of recession that could not only hit the industries but also create fragility of the banking sector. Despite the crisis in the southeast Asian nations and elsewhere, the Indian economy has been doing comparatively better with the highest ever foreign exchange reserves of $ 30 billion recorded last month.

The governor asked the industrialists and professionals to put the nation's growth at the rate of 5.5 per cent in right prospective.

Our capital market needs greater freedom and flexibility with stringent norms and surveillance system. The banks should be well managed with greater focus on lending particularly to small- and medium-scale industries. The health of the banking system is largely dependent on the performance of the industry, he added.

R H Patil, managing director of the National Stock Exchange, said that risk factors and cost in the market should be contained through various measures such as technology upgradation and fast settlement procedures.

Patil emphasised the need to set up a clearing corporation to settle deals and also act as an insurance cover at a nominal cost to the members, protecting them from the sudden crisis.

Highlighting various achievements and services of the NSE at 235 cities across the country, Patil said that the exchange had reduced the transaction cost substantially through high-tech equipment and was able to remove bogus brokers from the network.

Perhaps, it is the only exchange which pays all taxes on time with the online system of free entry and exit facilities for members.

In his welcome address, the AIAI president Vijay Kalantri said that the country needs a well-organised, well-diversified and competent financial system capable of meeting the requirements of an economy.

For capital markets, he felt that there was a need to modernise the stock exchanges and take confidence building measures to get back the retail investors.

UNI

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