Financial stability a challenge for RBI'

Mumbai: India's rapid integration with the rest of the world could pose complex challenges to its financial stability and the country would increasingly be exposed to the forces of globalisation, Reserve Bank Governor, D Subbarao said on Thursday.

"We cannot be globalising and at the same time expect to remain decoupled... If financial stability anywhere in the world is jeopardised, our financial stability will become vulnerable too," Reserve Bank Governor D Subbarao said at a FICCI-IBA Seminar here.

The apex bank is 'retooling itself to safeguard financial stability' and has set up a multi-disciplinary Financial Stability Unit, which would put out regular stability reports, Subbarao said.

The report will present an overall unified assessment of the health of the financial system with an analysis of potential risks to systemic stability, the Governor said, adding that the apex bank plans to come with the first report in the next few months.

Despite the 'cataclysmic' crisis, India's financial sector remained safe and sound, Subbarao said, adding, that the country would not slow down on reforms, but would surely rework the road map to reflect lessons of the crisis.

"There is a concern in some quarters that the crisis may have dented enthusiasm for financial sector reforms. I believe that concern is misplaced. We will not slowdown...but will surely rework the road map," Subbarao said.