"My hope is that we will get to full capital account convertibility in a short number of years," he said.
Full capital convertibility means a foreign investor can repatriate his money into his own local currency at will, which is not allowed in the country now.
Stating that the RBI is fairly open to capital inflows, the Governor said: "The only place today that we have some restrictions is inflows into debt, especially very short-term debt.
"I think most people would agree that opening up to short-term debt flows is usually not very clever for reasons of financial stability," Rajan said while delivering Kale Memorial Lecture at the Gokhale Institute of Politics and Economics here.
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It may be noted that many analysts had credited the RBI for its policy of partial capital control, which helped it tide over the impacts of the currency meltdown that many South Asian economies which had full capital convertibility in 1997-98.
In May-August 2013, capital control helped the country from going to the dumps following the taper talks by the US Fed. Even then the country saw as many as over USD 20 billion being pulled out of the country by foreign investors.