Accordingly, as an alternative, a single, harmonized and uniform legislation for close-out netting with overriding powers on all other Acts/Statutes applicable to all types of banks and other entities may be enacted. This will provide transparency, comprehensiveness and clarity and provide ease of regulation and supervision to the Reserve Bank.
The legislation can be a standalone law or can form part of existing laws – The Reserve Bank of India Act, 1934 or the Payment & Settlement Systems Act, 2007.Pending legislative changes, feasible options could be explored based on understanding with the Government. 20. There are examples in emerging markets which have attempted solving the netting issue, such as, the recent Malaysian example.