Developing economies such as India should have their own distinct model of financial regulation without aping polices of advanced economies, according to Dr Y.V. Reddy, former governor, Reserve Bank of India.
Delivering Indian Overseas Bank Platinum Jubilee commemorative oration on regulation in financial sector, central banks and developing countries here on Tuesday, Dr Reddy said too much of global coordination was not good beyond a point.
Referring the regulatory changes in the US, UK and Europe post-recession, he said: “They are reacting to their own mistakes. We can't have them.''
India should define its own strategy taking into account the need for growth, stability and equity, he added.
“In the global economy, diversity is important for survival,'' he said adding the current effort to have global coordination of financial sector regulation also had inherent ability to dilute diversity to impact stability adversely.
A comprehensive treatment of the issue of global capital flows and public policy at a national level has not been addressed adequately.
Terming the international banks as “most dangerous'', Dr Reddy said the challenge was to strike a synthesis between the national character of regulation and global nature of finance.
Mr M. Narendra, Chairman and Managing Director of Indian Overseas Bank, said his bank had crossed Rs 3 lakh crore mark in total business.
“We are in seventh position among the banks and are aiming to occupy the fifth position going forward,'' he added.