RBI plans retail inflation indexed savings from Nov

The newly minted governor of the RBI Dr Raghuram Rajan on Wednesday said that India should continue with its steady path of liberalisation and open up the financial markets further.

In his first speech after taking charge of RBI, the governor said that the Reserve Bank will introduce consumer price inflation-linked savings certificates by November to provide some cover to households. The central bank had recently launched inflation-indexed bonds.

He said households have expressed desire to be protected against CPI-based retail inflation, which has been hovering at the doubledigits mark for some time now. The move follows the introduction of inflation-indexed bonds introduced in June, and its multiple tranches have been already issued.

Dr Rajan said that RBI would implement a national gird-based Indian Bill Payment System such that households will be able to use bank accounts to pay school fees utilities, medical bills, and make person to person transfers electronically. “We want to make payments anywhere anytime a reality,” he said.

Stating that mobile payment could be game changer, Dr Rajan said that RBI would work to get banks and mobile companies to co-operate in rolling out mobile payments. “There is potential for mobile based payments. We will set up a technical committee to examine the feasibility of using encrypted SMS-based funds transfer using an application that can run on any type of handset,” the new governor said.