RBI wants to understand depth of household Financial Markets and spending patterns in India.The a committee has been setup by RBI to study Indian household financing pattern & the reason why they spend large amount of money on gold.
The panel will go through various facets of household finance in the country & to benchmark India’s position vis-a-vis both the peer & advanced countries, it said in a statement.
Panel headed by Tarun Ramadorai, a Professor of Financial Economics in University of Oxford will have representation from regulators of financial sector , Sebi, Irdai, PFRDA apart from Reserve Bank India.
It will consider whether, how, & why the allocations of households of India deviate from desirable financial allocation & behavior (eg, large household allocation to gold).
The committee has been asked to analyse the current depth of household financial markets in India in relation to those in other major world markets & to find out the areas of priority for growth & change.
The terms of reference also include evaluating the role of new financial technologies & products (like robo-advising, automatically refinancing mortgages etc.) in the cost-effective provision of high-quality & suitable financial products to the Indian households while containing risks.
The committee is expected to be submitting its report by end July 2017.
During the meeting of the Sub Committee of Financial Stability & Development Council (FSDC-SC) held in April, the demand for formal financial market investment products like pension & liability products like home loan etc. from the Indian household was talked about.