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Reserve Bank of India (RBI) Governor Raghuram Rajan said on Tuesday he was not in favour of taking regulation of bond markets away from the central bank as the move may hamper development of the market.
However, Rajan said the RBI will not stand in the way if the government wanted to manage its own debt.
The government-appointed Financial Sector Legislative Reforms Commission (FSLRC) has recommended a slew of reforms to overhaul the sector.
"I don't believe the government suffers any less from conflicts of interest in debt management (unlike the views of the FSLRC), but the RBI could well carry out the government's instructions without any loss in welfare," Rajan said in a speech at an industry event.
