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Two-Way Communication: The RBI Experience

Annex 2

Two-Way Communication: The RBI Experience

Status

Media provides constant feedback to the Reserve Bank of India. The top management closely monitor the newspaper clippings on relevant subjects on a daily basis. The concerned departments also regularly draw attention of Management to relevant news items published in the media with their comments/views which are noted or discussed and if required, communicated back to the media, formally or informally.

The Annual Policy Statement and its mid-term Review are announced in a meeting with the bankers and the Governor explains the rationale behind the measures at length. These policy meetings are not one-way traffic; bankers are encouraged to give their feedback   as also   any other suggestions. After the policy announcement, the Governor addresses the press which includes the regional press through video conferences. The video recording of the press conference is kept on the RBI website for at least a month. The Governor and the Deputy Governor in-charge of monetary policy give interviews to print and electronic media over the next few days. Moreover, the Reserve Bank has recently initiated taking feedback from bankers, market participants, representatives from industry, the cooperative banking system, prior to the announcement of the Annual Policy Statement and its mid-term and quarterly reviews, to facilitate a two-way communication. It is essential to appreciate that communication policy is not merely about explaining or getting feedback on policy, but may include elements of influencing the direction of policy itself.

Over the years, reports of committees and working groups have emerged as another plank of communication from the Reserve Bank. The Reserve Bank ensures that the committees and working groups include financial sector participants or markets. Many of these committees are conceptualised during the process of either in the Annual Policy Statement or in its Mid-year Review, so that by the time of the announcement of the next policy is due, their recommendations are available for consideration or for implementation. For the Reserve Bank, thus, committees and working groups remain a major vehicle of the collective policy thinking.  Major changes in policy are invariably introduced after extensive discussion with stakeholders. The process is quite detailed and involves consultations at all stages. On many occasions, first, a committee is formed with market participants as members along with the Reserve Bank officials. The report of this committee placed in public domain for comments and feedback from all stakeholders. Based on the feedback received, the draft regulations are formulated and are placed in public domain again for feedback. Based on the feedback received the regulations are then finalised and put out for implementation. Often the committee with market participants is preceded by an internal working group to establish the need for change and to study the prevailing international best practices in the area.

Another significant step towards two-way communication in policy implementation is formation of various Technical Advisory Committees (TACs) in the Reserve Bank with representatives from market participants, other regulators [like the Securities and Exchange Board of India (SEBI) or the Insurance Regulatory and Development Authority (IRDA)] and experts. Over the years, such Technical Advisory Committees have emerged around key functions of the Reserve Bank. There is one TAC each on monetary policy, financial markets, financial regulation, information technology and SMEs. These fora act as platforms where the Reserve Bank comes to know about the needs of market participants and where the Reserve Bank is able to communicate its stand on these issues that may not be strictly feasible in the formal modes of circulars. Many of the agenda notes prepared for these meetings form the background of the bi-annual monetary policy announcements. Resource Management discussions before the Annual Policy with banks and other market participants act as another mode of a two-way communication. Meetings with the State Finance Secretaries are another platform of communication.

The Reserve Bank also takes note of suggestions and feedback received through letters and emails or any other means of communication received from stakeholders or even individuals. Individuals can also use the Right to Information Act to get the information that he wants from the Reserve Bank. The Reserve Bank, in fact, received 5414 applications under the Right to Information Act during 2007-08 and has fully resolved 5218 applications. Of these, 68 per cent applicants received full information that they had sought. Once the information has been sent to the applicant and if it is found to be useful to a larger section of the populace, the Reserve Bank endeavours to bring it on its website at the earliest.

All Regional Offices and Central Office Departments have set up a helpdesk which can be accessed through letter, email, phone call for clarifications relating to subjects dealt with by the Reserve Bank. Individuals can also approach a centralised External Relations Cell in Department of Communications for any clarification.

The Reserve Bank disseminates information through press releases, notifications, master circulars, publications, speeches, frequently asked questions and advertisements. During the year ended June 30, 2008, the Reserve Bank issued 1686 press releases, 87 master circulars and 388 notifications. The e-mail helpdesks furnish replies to the queries raised by the general public. Members of the public send their queries relating to banking, foreign exchange, economy, customer service through e-mail/telephone/fax to the helpdesks set up in various departments and Regional Offices. These queries are over and above the queries received under the Right to Information Act.

 The Reserve Bank makes extensive use of its website (URL: http://www.rbi.org.in) in communicating with external audiences.  This is evident from the size of the website which is 46 GBs as in July 2008.  The site is used not only to disseminate information emanating from the Reserve Bank but also to seek feedback on reports and recommendations as well as on draft regulatory guidelines.  During 2007-08, for instance, 7 draft reports and 12 draft guidelines were placed on the website for feedback.    Nearly 15,000 users have registered themselves to receive information released by the Reserve Bank.

 
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