FM maintains govt has no plans to impose capital controls

FM maintains govt has no plans to impose capital controls

Washington: Maintaining that there is no turbulence in the Indian financial markets, the Finance Minister P Chidambaram has said that the government of India has no intention to impose any kind of capital controls or keep out any kind of funds.

“There is no turbulence. It was an instant reaction by fund managers that some kind of restrictions are being placed on investments by Foreign Institutional Investors," Chidambaram told PTI.

He said the government has clearly mentioned that it has no intentions to impose capital controls, or to keep out any kind of funds.

“All we say is that instead of coming through a non-transparent route of participatory notes issued on the basis of overseas derivative instruments, please come in as FIIs and register in India," he added.

Yesterday, capital market regulator Sebi had said it has cleared 16 FII applications for registration and announced that it would allow proprietary sub-accounts to register themselves.

“It increases transparency. It also subjects these investors to due diligence by Indian authorities. I think the clarifications have gone home now," the Finance Minister said going on to reject the call of the Left parties in India to ban Participatory Notes (PNs).

“I don’t think the Left parties have quite understood the complexity of the issues. It is a very simplistic call -- ban participatory notes," said Chidambaram who is in Washington to attend the Annual Meetings of the International Monetary Fund and The World Bank.