India's RBI advocates cautious pension reform

"Caution is advocated against instituting any large-scale changes in the pension system or regulatory changes without ensuring reforms in other areas," Reserve Bank of India deputy governor Y J Reddy told a seminar on pension reform. "The introduction of the private sector in managing funded pension should take into account not merely system of regulation and supervision or accounting standards or risk management, but also financial market infrastructure."

The government is currently working on reforms in the pension business following its reforms in the banking and insurance sectors. The deputy governor said India was still developing its financial market infrastruture. He added that the central bank had also cautioned against the government assuming contingent liabilities while assuring schemes of private pension sponsors.