HEADLINES:
June 17 2019
RBI Board discusses governance
15 December 2018

Agrees to examine the issue further; reviews liquidity, credit delivery, economic situation

The board of the Reserve Bank of India (RBI), which met here on Friday, agreed to examine the issue of governance further.

“The board deliberated on the governance framework of the Reserve Bank and it was decided that the matter required further examination,” the RBI said in a statement.

This was the first board meeting under the chairmanship of the new RBI Governor Shaktikanta Das, who assumed charge on Tuesday.

The statement also said the board reviewed various issues like current economic situation, global and domestic challenges, matters relating to liquidity and credit delivery to the economy, and issues relating to currency management and financial literacy.

Mr. Das assured the board that he would discuss the deliberations on capital management and governance with the government for an early resolution, sources said.

Mr. Das listened to all the points of discussions, including those which had caused discomfort within the RBI brass, they said.

The four-hour meeting was very smooth and cordial, the sources familiar with the board deliberations said.

Patel lauded

The board ‘placed on record its appreciation of the valuable services rendered’ by Mr. Patel during his tenure as Governor and Deputy Governor of the bank.

RBI had imposed restrictions under the PCA framework for 11 public sector banks, which irked the government as it believed loan growth was impacted due to such restrictions.

There is a possibility that a formal proposal on PCA will be brought before the board at its next meet in mid-January, which is likely to happen in New Delhi, according to sources.

“The board may also come to a conclusion as early as at the next meeting itself,” they added.

Contentious issues

The issue of liquidity and credit delivery were the two contentious issues between the government and RBI with the former wanting a special window for non-banking finance companies.

“The draft report on Trend and Progress of Banking in India (2017-18) was also discussed,” the statement added.

 

 

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