There is a need to provide constitutional status to Reserve Bank of India. Do you agree with this view? Comment (200 Words)
Refer - The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The National Stock Exchange (NSE) co-location saga is the latest in a series of scams that have rocked the Indian financial sector recently.
· The constitution-created regulators are independent (usually), whereas those in the second and third categories can be easily undermined by the ministers and the bureaucrats.
· The solution is the government granting constitutional status to the financial regulators. While one is not aware of constitutional status being accorded to capital market regulators elsewhere, there are several cases of central banks being given constitutional status.
· Interestingly, India is on the list of the 22 nations with constitutions. In our Constitution, RBI finds a place only once as Entry 38 of List 1 of Schedule VII, which allocates powers between the Union and the states.
· The unravelling financial scams in India and inability of financial regulators to address these should prompt a rethink, and a possible redesign, of the regulatory space.
· There is also an interesting connection between India’s Constitution and its central bank. BR Ambedkar, the architect of the Indian Constitution, had studied Indian currency and debated establishing a central bank in his second doctoral dissertation.
· From his heavenly abode, Ambedkar must have noted how some constitutions discuss the role of their central banks in detail.
