country – easier to define laws of which jurisdiction apply – better corporate governance, local board of directors – effective control in a banking crisis and enables host country authorities to act more independently as against branch operations – regulatory comfort • potential down side risk could be domination of the domestic financial system by wholly owned subsidiaries ( wos ) of foreign banks. • there were certain taxation and other issues which needed to be resolved in consultation with govt. of india. the income tax act has since been amended to exempt foreign bank from payment of capital gains tax on subsidiarisation. the banking laws ( amendment ) bill, 2012 amended the indian stamp act, 1899 whereby conversion of branch / es of a foreign bank into wos as per the scheme or guidelines of rbi shall not be liable to duty under the indian stamp act, 1899 or any other law for the time being in force. • apart from taxation issues, there are a few other important issues in conversion of foreign bank branches into wholly owned subsidiaries, mainly of a legal nature, like transfer of rights and liabilities, finality of transfer, etc. which need to be addressed. these issues are under examination of the reserve bank. after resolution of all these issues comprehensive guidelines on subsidiarisation of foreign banks in india will be issued. conclusion • i have raised some issues relevant in the context of thinking through a banking structure for india that best promotes our aspiration for fast and inclusive growth. • i am conscious i raised issues without necessarily giving the reserve bank ’ s views. that is deliberate. the reserve bank needs the benefit of larger and informed debate on these issues. • i trust you will engage on these issues when the reserve bank ’ s discussion paper comes out in a few days. • my best wishes for the success of this conference. • thank you once again for inviting me. bis central bankers ’ speeches annex indicators of impact of financial sector reforms bis central bankers ’ speeches

contraction. the phase two ( heightened alert ) measures and continued restrictions under phase three ( heightened alert ) however will have a transitory impact on employment in the domesticoriented services sector. the near - term impact on resident employment should be mitigated by targeted policy support such as enhanced wage support and rental waivers and rebates. core inflation should continue on its gradual recovery path, with the 2021 forecast unchanged at 0 to 1 %. 3 / 9 bis central bankers'speeches while some increase in import prices is expected, this should be confined to certain noncooked food items. but domestic cost pressures will be muted given the lingering slack in the labour market. the cpi - all items inflation forecast is revised to 1. 0 to 2. 0 % from 0. 5 to 1. 5 %. the revision takes into account higher - than - expected car prices in q2, due to the sharp rise in coe premiums. cpi - all items inflation, which rose by 2. 2 % in april and may, is expected to ease in the second half of this year as base effects fade. the property market has been remarkably resilient in the face of the pandemic and recession last year and continued uncertainty over covid - 19 risks this year. while nominal gdp contracted 8. 2 % in 2020, the residential property price index rose by 1. 6 % during the year. as at q1 2021, the ppi was 5. 6 % above its pre - pandemic levels, while nominal gdp was about 4 % below. mas, together with mnd and ura, remain highly vigilant to the risk of a sustained increase in prices relative to income trends. a prolonged divergence between prices and incomes is unsustainable from a market stability perspective and undesirable from a housing affordability perspective. monetary policy even as singapore emerges from the trough of the covid - 19 crisis, mas has been keeping a close watch for risks to macroeconomic stability and market liquidity. mas reaffirmed in october 2020 and in april this year the accommodative monetary policy stance it adopted in march last year of a 0 % appreciation path for the nominal effective exchange rate policy band. the easing of monetary policy last year was to prevent a broadening of disinflationary pressures following the sharp fall - off in economic activity after the onset of the pandemic. while the risk of persistent disinflation has receded, core