Financial Systems Design

The SDG Agenda, the sovereign debt crisis and the climate crisis will need brave leadership from not just individual governments of both the global north and the south, but also groups such as the United Nations, the G20, G7 and others, to closely negotiate tough decisions that can have enough impact on the triple inequality – of wealth, carbon and power.

Analysing the contents of the Reserve Bank of India’s biannual FSRs and the methodology of the RBI’s supervisory stress tests reveals that there is scope for improvement, specifically regarding the continuity in the tracking of certain risk drivers, the extent of commentary on the information, and aspects of stress tests.

Large gaps exist in life insurance coverage in India. The paper examines this issue through a supply-side lens by examining the two key features—the distinction between the agent and the broker model and the alignment of incentive structures with product life-cycle servicing.

Low-income households work with irregular income inflows, resulting in shrinking financial planning horizon and necessitating frequent decisions in response to frequent changes.

Social enterprises will have to conform to much higher standards of reporting than they are conventionally used to.

In this note, we discuss how the current approach of the PCA framework is inconsistent with the objectives it seeks to achieve.

By requiring only limited public reporting on asset quality, banks in India have enjoyed a level of opacity that banks in other jurisdictions do not

An RBI Working Group has suggested that lending service providers be disallowed from providing credit enhancements such as FLDG (first-loss-default-guarantee). However, a risk-proportionate regulation of FLDG could address its risks, while allowing the ecosystem to benefit from innovation.

We presented detailed feedback on the Reserve Bank of India’s Discussion Paper on Review of Prudential Norms for Classification, Valuation and Operations of Investment Portfolio of Commercial Banks in the form of answers to the ten questions posed within the Discussion Paper.

In our response, we commend and highlight the more risk sensitive methodology and the corresponding disclosures outlined in the draft guidelines. However, we also point out that not including conduct risk under operational risk is a major lacuna.