Prof. J. D. Agarwal, Chairman & Director, Indian Institute of Finance, Delhi while delivering K.S. Mathur Memorial Lecture at the University of Rajasthan, Jaipur on “Financial Developments in the world Economy” has suggested that there is a need for developing the Regional Monetary Funds to monitor, regulate and suggest measures to the countries of the region. According to him, International Monetary Fund (IMF), which is currently viewed as a single global institution with no alternatives, should rather become an apex institution with a network of regional or sub-regional monetary funds.

According to Dr. Agarwal, India should take initiative to form sub-regional IMF-SAARC Monetary Fund to assess and help the member countries of this region as most of the other SAARC members are passing through financial crisis and need help to take care of their economic development.

Dr. Agarwal has also suggested that the working of IMF should be reviewed and it is not appropriate that the same set of conditionalities are recommended for every economy irrespective of its requirements. According to him, IMF package uniformly insists on well tightening, devaluation and demand compression measures that affect growth adversely and hence make recovery even more difficult. He has also suggested that there is a need for revival of SDRs fund allocations to supplement international liquidity.