"Communication of the Financial Stability and Development Council (FSDC) or its sub-committee on the Finance Ministry or the RBI websites tends to be brief and often does not describe the judgements considered or the decisions made," the FSB said in its peer review report of India.
"It may be useful to market participants and the public if communication on the deliberations of the authorities on macroprudential policy was enhanced," the report said.
FSB, a global organisation, monitors and makes recommendations about the financial system of various countries.
FSDC, an autonomous apex-level body of India, deals with macroprudential and financial regularities in the country's financial sector.
There are reasons for keeping some information related to financial stability confidential, since its publication may cause adverse market reaction, the report said.
But, in general, a public communication strategy can represent a 'soft' tool for macroprudential purposes that conveys the intended messages to financial market participants, it added.
"It also can introduce more accountability and educate the public on financial stability issues," the report said.
"The current channels of communication on financial stability have varying degrees of transparency. Senior RBI officials sometimes give speeches on financial stability issues," it added.
Changes in the RBI's tools for macroprudential purposes are disclosed on the RBI website and in an annual publication, but focus mainly on the change itself rather than the policy context and its implications in the macroprudential stance, the report stated.
