Disclosing this, RBI deputy governor YV Reddy, in his address at the RS Bhatt memorial lecture on Thursday, said the panel's reference will be identify and monitor international financial standards and codes in light of global developments, applicability of these codes to the Indian context, periodical review of standards and codes and suggestions on smooth disbursal of information on applicable codes to various organisations.

"The standards and codes should be acceptable to countries as it touches on their sovereignty," Reddy said. The RBI deputy governor said that implementation of capital account convertibility in the country would depend on the domestic fiscal position and strength of the financial sector. "There also has to be an assessment of the risk factor," Reddy averred adding that moving towards convertibility on the capital account was an ongoing process.

Reddy said that the country's escaping the Southeast Asian financial crisis was not an "accident" but a result of sound economic policies. In this context, the deputy governor stated that countries that faced the crisis had a large proportion of short-term debt to foreign exchange reserves. "Our forex reserves have not increased due to commercial borrowings. The only component of foreign currency assets in the reserves is on account of bilateral and multi-lateral aid received by the country under international agreements," he said. He attributed the financial crisis of 1991 that hit the country to bunching of debt repayment obligations. "But, the fact is we never dishounored any financial obligations," he observed. He felt that keeping external debt limited has a role in avoidance of financial crisis.

Delivering the RS Bhatt memorial lecture, Barry Eichengreen of University of Berkeley said that the International Monetary Fund (IMF) will need to take the function of rating agencies.