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Take away RBI's regulatory power: Chidambaram

Reserve Bank of India's regulatory functions should be taken away and given to another body to improve surveillance over irregularities in the capital market, former Finance Minister P Chidambaram told the Joint Parliamentary Committee looking into the stock scam on Thursday.

"The RBI should remain only a central bank and the regulatory role should be performed by somebody else", JPC chairman Prakash Mani Tripathi quoted Chidambaram as telling the committee.

Tripathi said Chidambaram was in agreement with Finance Minister Jaswant Singh, who appeared before the JPC on Wednesday, that the revenue loss of Rs 350 crore (Rs 3.5 billion) projected in some quarters due to the Mauritius route facility was only "notional".

Chidambaram, however, said RBI was doing an excellent job in the given situation.

Since Chidambaram was the finance minister in 1996-97, much before the scam took place in 2000, the queries revolved around UTI's problems and the Mauritius route issue, Tripathi said.

Stating that the former finance minister gave a "balanced view", Tripathi said Chidambaram stated that during his tenure, the government was not fully geared to an independent regulatory policy.

"The government during that time was one which issued instructions besides being a regulator and a service provider", Chidambaram told the JPC.

He said while major changes were taking place in the country, which saw the economy becoming liberalised, there has not been any visible change in government's policy.

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