RBI ok with full rupee convertibility |
RBI Governor Raghuram Rajan said on April 10 the central bank was looking at allowing full capital account convertibility in a few years. Full capital convertibility means a foreign investor can repatriate his money into his own local currency at will, which is not allowed in the country now. Most would agree that opening up to short-term debt flows is usually not very clever for reasons of financial stability, Rajan said while delivering Kale Memorial Lecture at the Gokhale Institute of Politics and Economics. Rajan`s comment on full capital convertibility assumes importance as Finance Minister Arun Jaitley launched the country`s first international finance centre in Gujarat. Full rupee convertibility can go a long way in the effective functioning of this global financial services hub. Gujarat`s Gift City has been notified as an International Financial Services Centre (IFSC) and the norms unveiled for it to become financial hub at a function led by Jaitley in Gandhinagar. GIFT can now accept applications from banks to set up IFSC Banking Units (IBUs) that are similar to overseas branches.
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