Question:
Which among the following committee is connected with the capital account convertibility of Indian rupee?
ATarapore committee
BTiwari committee
CChellaiah committee
DNarasimham committee
Answer:
A. Tarapore committee
Explanation:
- The Committee on Capital Account Convertibility (CAC) or Tarapore Committee was constituted by the Reserve Bank of India for suggesting a roadmap on full convertibility of Rupee on Capital Account.
- The committee submitted its report in May 1997.
- The terms of reference for the committee included
- To examine implications of fuller capital account convertibility on monetary and exchange rate management, financial markets, and financial system
- To study the implications of dollarisation in India of domestic assets and liabilities and internationalization of the Indian rupee
- To provide a comprehensive medium-term operational framework for fuller capital account convertibility taking into account the implications and progress in revenue and fiscal deficit of both center and states
- To survey regulatory framework in countries that have advanced towards fuller capital account convertibility
- The committee in this regard laid emphasis on improving the Regulatory and supervisory standards across the banking system before making the rupee more freely tradeable.