RBI sets up financial markets advisory panel amid rapidly evolving market risks

The Reserve Bank of India (RBI) has constituted a Technical Consultative Committee for Financial Markets (TCCFM), bringing together senior banking executives, market experts and financial industry representatives to advise the central bank on the functioning, regulation, and resilience of India’s financial markets.

The move comes against the backdrop of rapidly evolving financial markets and infrastructure, with the RBI seeking a more structured mechanism to engage market participants on policy and operational issues affecting the money, government securities and foreign exchange markets, as well as their associated derivatives markets.

The committee will be chaired by the Deputy Governor in charge of the Financial Markets Regulation Department (FMRD) of the RBI. Its external membership includes representatives from the banking sector, market infrastructure institutions, financial research, and the securities market.

Among those appointed are Ananth Narayan, former Whole Time Member of the Securities and Exchange Board of India (SEBI) and Professor of Practice at IIT Bombay, Shamsher Singh, Chairman of the Fixed Income Money Market and Derivatives Association of India (FIMMDA) and Deputy Managing Director of State Bank of India and Neeraj Gambhir, Executive Director of Axis Bank.

The other members are Shailendra Jhingan, Head of Treasury and Economic Research at ICICI Bank; Aditya Bagree, Managing Director and Head of Markets at Citibank India, Nand Kishore, Managing Director of the Clearing Corporation of India Ltd and Ridham Desai, Managing Director of Morgan Stanley India.

The constitution of the committee follows the announcement made in the RBI's Statement on Developmental and Regulatory Policies dated October 7, 2026. Its creation signals an institutional effort to strengthen consultation between the regulator and market participants at a time when financial markets are becoming increasingly complex and interconnected.

The composition reflects the RBI's intention to draw on expertise from across different segments of the financial system rather than confining consultations to banks or individual market associations. The committee's mandate is wide-ranging.

It will examine issues concerning the functioning, efficiency, liquidity, and resilience of money markets, government securities markets, foreign exchange markets and related derivative markets. It will also identify measures to deepen and broaden these markets.

A significant part of its remit will focus on market infrastructure, including trading, clearing, settlement and reporting mechanisms, alongside the regulatory and operational frameworks governing these activities. This is particularly important because the efficiency of financial markets depends not merely on trading activity but also on the systems that support transactions, manage risks and ensure orderly settlement.

Weaknesses or operational bottlenecks in these areas can affect market confidence and liquidity. The RBI has also given the committee a mandate to examine emerging policy and operational challenges, including the implementation of central bank measures and the identification of unintended market frictions.

This provision could provide an avenue for market participants to flag practical difficulties arising from regulatory changes and suggest improvements. The committee will also consider domestic and international developments, financial innovations and emerging risks that could have implications for financial markets.

RBI may also refer specific market-related issues or macroeconomic considerations to the panel for examination. Importantly, the committee is being positioned as a forum for structured engagement, not merely an occasional consultation mechanism.

Its meetings will be convened at least once every quarter, providing a regular channel for interaction between the central bank and external stakeholders. While the RBI's announcement does not specify whether the committee's recommendations will be binding or whether its deliberations will be made public, its establishment creates a formal platform for market expertise to feed into regulatory and operational discussions.

The larger test will be whether this consultation translates into more efficient markets, stronger infrastructure, deeper liquidity and a regulatory framework capable of responding to emerging risks. By bringing together banks, market institutions, financial experts and global investment experience, the RBI is seeking to widen the conversation around India's financial market architecture.

George Mathew is an Associate Editor with The Indian Express, based in Mumbai. A veteran of financia... Read More