RBI raises concerns over govt proposal on currency futures

The Reserve Bank of India has raised several concerns over the government’s proposal to use the existing infrastructure of stock exchanges for introducing currency futures. In its technical advisory committee meeting with market participants yesterday, RBI said that foreign exchange and related activities should be isolated from all other businesses of exchanges and for the participants in the market like banks or brokers. Further, any existing exchange, even if allowed to float a platform for currency futures, should have a diversified shareholding pattern. RBI said exchanges could float separate bourses for the currency futures business as it would become a wholly owned independent subsidiary with separate books. Further, banks who would be the major participants in the currency futures business are regulated by RBI.