y v reddy : implementation of financial standards and codes : indian perspective and approach speech by dr yv reddy, deputy governor of the reserve bank of india, at the conference on international standards and codes organised by the imf - world bank, held in washington dc, 7 - 8 march 2001. the appendix mentioned by dr reddy can be obtained from the reserve bank of india. * * * in this paper it is proposed to describe the indian perspective and approach in regard to the implementation of international financial standards and codes advocated by the financial stability forum ( fsf ). the indian efforts in this direction also seek to complement and support the ongoing initiatives of the g - 20 aimed at encouraging implementation of standards and codes among member countries. the paper is schematized as follows. section i explains india ’ s stand on global initiatives for implementation of standards and codes. while section ii narrates india ’ s association with global efforts in evolving and promoting financial standards and codes, section iii describes the indian approach to the implementation. section iv mentions the institutional arrangements that have been put in place to guide the process of implementation. section v provides an account of the work processes followed by advisory groups in the course of preparation of reports. section vi indicates the current status, while section vii touches on the plans for following up on the submission of reports. section viii brings out some highlights of indian experience so far. i. india ’ s stand 1. 1 india is fully supportive of the need to observe certain minimum universally accepted standards in areas relevant to the maintenance of stability in the international monetary system, including increased transparency in formulation and implementation of monetary and financial policies and improvements in dissemination of relevant data. the establishment of a high - powered standing committee on international financial standards and codes ( standing committee ) underscores india ’ s commitment to this international enterprise. at the same time, india has been voicing, in the international fora, some of its concerns regarding the manner of international financial institutions spearheading the implementation and assessment of codes and standards. india advocates a voluntary approach, fair, equitable, and continuous process taking duly into account the institutional and legal structure and stage of development in different countries. 1. 2 although the notion of a code of good practices is intuitively appealing, the temptation to prescribe universally valid model codes which do not allow for differences in institutional development, legislative framework and, more broadly, different stages of development must be avoided. sometimes there is a tendency to recommend the practices of major industrial

group on banking supervision has eminent experts from the housing development finance corporation ( hdfc ) and icici bank. the advisory group on bankruptcy laws also includes practicing professionals and eminent academics, including the former director of national law school as the chairman of the group. 5. 7 the advisory groups were encouraged to prepare in tabular form the given international standard / code, current status in india and the corresponding recommendation of the group as a supplement to the narrative to facilitate easy reference. 5. 8 as and when the reports are received by the standing committee, they are placed on the reserve bank of india ’ s website for immediate wider public dissemination. vi. current status 6. 1 as of now, the reports / part of reports in respect of the following subjects have already been received by the standing committee : transparency of monetary & financial policies ( final ), payment and settlement system ( parts i and ii ), insurance regulation ( final - parts i and ii ), banking supervision ( part i ), accounting and auditing ( final ), bankruptcy laws ( interim ). all reports have been placed on the rbi website < www. rbi. org. in > and are in the process of being published for wider dissemination and discussion. 6. 2 the ‘ foreword ’ to the first in these series of reports on ‘ transparency in monetary and financial policies ’ is presented as an appendix to this paper. as may be seen, the effort is to make the readers aware of what standards and codes are and their importance for national economies in the current milieu. vii. plans for follow up 7. 1 the submission of the reports by advisory groups would be followed up in accordance with the decisions of the standing committee meeting held on september 20, 2000. 7. 2 the standing committee would consolidate the reports of all advisory groups and prepare its own report containing executive summaries / highlights of all the reports, action points requiring attention by regulatory authorities / agencies concerned with the follow up. the standing committee report also would be widely disseminated to the public as the advisory group reports. 7. 3 the advisory group would be requested to help organise a seminar / workshop for a day in an appropriate institution / centre for creating awareness and this would help the standing committee to concretise the views on recommendations. 7. 4 for each report, a mailing list covering both public sector and private sector organizations, international institutions and experts, both local and international, would be also be identified and finalised in consultation with the chairman