The road ahead for Rajan

Reserve Bank of India has a new governor, Raghuram Rajan. While Rajan's immediate job would be to determine the stance of monetary policy, and hand out banking licences, as RBI Governor for the next five years, his main task must be to transform RBI into a modern central bank. The task of transforming RBI into a modern central bank consists of redefining the mandate of the central bank and its functions, clearly defining the objective of monetary policy and institutions related to conduct of monetary policy, and redesigning the role of RBI as a banking regulator.

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