Financial regulation in India: Are there lessons for the West?

INDIA

Just a few blocks from our offices in Mumbai stands a colonial style building which houses India's Mint, and next to that, in a tall imposing office block, sits the Reserve Bank of India (RBI).

Since 1935 the RBI has stood at the centre of the country’s financial system with a fundamental commitment to maintain its stability. The RBI’s mandate extends beyond the functions of a typical central bank. Post the Lehman Brothers collapse, the RBI was successful in ensuring the Indian economy was relatively unaffected by the onset of the financial crisis, and by cutting interest rates aggressively, it ensured growth remained resilient. The easier liquidity environment and the speed of the recovery, though, had an immediate inflationary impact, and since 2010 the RBI’s challenge has b...