Economics
India's Central Bank Needs Far Bigger Capital Buffer, Study Says
- Reserve Bank of India’s capital lower than average of EMs
- Undercapitalized central bank can infringe on independence
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India’s central bank has insufficient capital, much less a surplus to hand over to the government, a new study shows.
Operating losses could push the RBI to seek financial assistance from the government, compromising its autonomy, wrote the authors, led by Amartya Lahiri, director at Mumbai-based think tank Centre for Advanced Financial Research and Learning and a professor at the University of British Columbia.