Third, it was suggested that the Government should set up its own independent debt management office to take over the present functions discharged by the RBI, and thus avoid conflict of interest in conduct of monetary policy. RBI in its annual monetary policy of 2001, has announced progress made in this regard and its intention to divest itself of the debt management function.
An enabling proposal to delink the function of debt management of the Government from the Reserve Bank has been made in the RBI (Amendment) Bill 2001. The Government has also decided, in principle, to delink these functions.