The Hindu Business Line : RBI for monitoring hedge, private equity funds

A case was made by the RBI on Thursday for monitoring hedge funds and private equity funds currently dominating international financial markets, while being outside the purview of know your customer (KYC) norms.

The lack of transparency in deals of hedge funds is a global issue and regulators worldwide are looking to monitor them, said the RBI Governor, Dr Y.V. Reddy, while speaking at a seminar organised by the FICCI.

"Hedge funds are opaque. Information about their portfolio is infrequent," Dr Reddy said. But from the policy perspective, transparency for investors is important, he said.

Monetary authorities, therefore, need to maintain database of positions held by hedge funds, he added.

Globally interest rates seem to be hardening, he said.

While India cannot remain isolated from global trends, it is likely to be less affected.

One reason could be that the trade pattern of Indian corporates is more diversified than before. Also there is a comfort in oil prices going down and not up, he added.

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