Govt slugfest with RBI finally ends in a draw
6 years, 1 month ago

Govt slugfest with RBI finally ends in a draw

Deccan Chronicle  

It was an unequal fight to begin with. Raghuram Rajan, arguably the most flamboyant RBI governor in recent times, who set in motion the deep reforms of banks by tightening prudential oversight, was fond of citing the god of the bond market as the final arbiter of the central bank’s performance. An ugly public spat with the RBI could rake up the question of why the government took time to act on the list of bank defaulters sent to it by Raghuram Rajan. Judicious “leaks” to the media that RBI governor Patel might resign if he was pushed too far added to the pressure on the government to compromise. Requiring the RBI to transfer its surplus rather than issue government securities of a similar volume has the optical accounting “benefit” that transfers, unlike new securities, do not increase the fiscal deficit and could help the government keep within the target of 3.3 per cent of GDP.

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History of this topic

Raghuram Rajan recalls having ’plenty of cooperation’ with govt as RBI governor: ‘Whether BJP or Congress…’
3 weeks, 4 days ago

Raghuram Rajan recalls having ’plenty of cooperation’ with govt as RBI governor: ‘Whether BJP or Congress…’

Live Mint  

Former RBI governor Raghuram Rajan recalled having an amicable relationship with the government during his tenure as RBI governor — irrespective of the party in power. The former top official also recalled a conversation with then Finance Minister Arun Jaitley where he was given the green signal to “clean up” the system after bad loans “tumbled out” during an asset …

Former RBI governor Urjit Patel says before 2014, RBI and government was slow in tackling bank crisis
5 years, 6 months ago

Former RBI governor Urjit Patel says before 2014, RBI and government was slow in tackling bank crisis

Op India  

In his first remarks after resigning from the position of governor of Reserve Bank of India, Urjit Patel held banks, government and the RBI responsible for the spiraling crisis of bad loan mess and the following low capital buffers till 2014. Patel was invited at Standford University where he spoke about the areas of concern for the country’s banking sector …

Opinion | An intruder undermines RBI
5 years, 10 months ago

Opinion | An intruder undermines RBI

Live Mint  

Bankruptcy proceedings usually involve protecting a firm’s assets from creditors. The ruling by the bankruptcy court, which is overseeing the government- Already India has lost two RBI governors because, among other things, they dared to ask banks to acknowledge problem loans in time, classify them correctly and make adequate provisions for losses. Already-delayed Indian tribunal proceedings will stretch forever, with …

Bimal Jalan to head panel to decide on RBI cash reserves: Former central bank governor enjoys govt support, but committee to have final say
6 years ago

Bimal Jalan to head panel to decide on RBI cash reserves: Former central bank governor enjoys govt support, but committee to have final say

Firstpost  

Jalan will lead a six-member committee which will review the status, need and justification of various provisions, reserves and buffers presently provided for by the RBI The Reserve Bank of India on Wednesday formed an expert committee on economic capital framework led by former RBI governor Bimal Jalan to determine the amount of reserves it needs to keep and the …

Much ado about nothing: Demystifying the needless hue and cry over the RBI
6 years ago

Much ado about nothing: Demystifying the needless hue and cry over the RBI

Op India  

“The only function of economic forecasting is to make astrology look respectable,” remarked the legendary Economist John Kenneth Galbraith. Whoever in Congress thought of RBI autonomy and role in influencing election outcome doesn’t have enough knowledge to even make credible sounding arguments. According to the RBI Act’s Section 7, “the central government may from time to time give such directions …

Facts, No Fiction: There’s a new sheriff in RBI
6 years, 1 month ago

Facts, No Fiction: There’s a new sheriff in RBI

Op India  

This week has been a roller coaster ride, from high profile extradition cases, the resignation of the RBI governor and the results of recent assembly elections. That being said, it is well acknowledged that India has one of the tightest of monetary policies and that too at a time where inflation seems to be significantly lower than even RBI’s estimates. …

Arun Jaitley admits to issues with RBI on credit flow, liquidity as govt under fire for Urjit Patel's sudden exit
6 years, 1 month ago

Arun Jaitley admits to issues with RBI on credit flow, liquidity as govt under fire for Urjit Patel's sudden exit

Firstpost  

Though Jaitley did not explicitly mention it, the discussions he was alluding to were under Section 7 of the RBI Act, through which the government of the day can force down certain policies for the central bank to implement, citing national interest Mumbai: Under fire for the surprise resignation of governor Urjit Patel, senior Union ministers went on an offensive …

Shaktikanta Das, who oversaw demonetisation, is new RBI governor
6 years, 1 month ago

Shaktikanta Das, who oversaw demonetisation, is new RBI governor

Live Mint  

New Delhi/Mumbai: The government on Tuesday appointed Shaktikanta Das, member of the fifteenth finance commission, as the governor of the Reserve Bank of India, a day after Urjit Patel resigned at the end of a bruising tussle with the government over the regulator’s independence and the regulation of banks. Das, who was secretary in the department of economic affairs when …

Exit RBI governor Urjit Patel, enter wrath of the markets?
6 years, 1 month ago

Exit RBI governor Urjit Patel, enter wrath of the markets?

Live Mint  

Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution,” Viral Acharya, deputy governor of the Reserve Bank of India, said less than two months ago. News reports had suggested that RBI governor Urjit Patel will resign …

Opinion | Reserve Bank of India governor goes far too quietly
6 years, 1 month ago

Opinion | Reserve Bank of India governor goes far too quietly

Live Mint  

People who know Urjit Patel, the Reserve Bank of India governor, told me he would stay on and fight. But after a November meeting of the institution’s board, it looked like the central bank and the government had decided not to bring matters to a head and Patel, whose term expires in September 2019, would stick around. The terse resignation …

RBI chief Urjit Patel resigns: 6 areas of conflict with government
6 years, 1 month ago

RBI chief Urjit Patel resigns: 6 areas of conflict with government

Hindustan Times  

A protracted tiff between the Indian government and the Reserve Bank of India climaxed on Monday when central bank governor Urjit Patel resigned, days before a board meeting where he would have faced intense pressure. A protracted tiff between the Indian government and the Reserve Bank of India climaxed on Monday when central bank governor Urjit Patel resigned. Read: RBI …

How Money Markets May React to RBI Governor Patel’s Resignation
6 years, 1 month ago

How Money Markets May React to RBI Governor Patel’s Resignation

The Quint  

Ananth Narayan, SP Jain Institute Of Management And Research “It is a complete shocker. I am in Hong Kong meeting investors and the reaction internationally is one of shock. Unfortunately, this is coming on the back of what has been a pretty public disagreement between the government and RBI. All the contentious issues discussed so far, I hope and pray …

‘It’s BJP, RSS agenda’: Rahul Gandhi on RBI governor Urjit Patel’s resignation
6 years, 1 month ago

‘It’s BJP, RSS agenda’: Rahul Gandhi on RBI governor Urjit Patel’s resignation

Hindustan Times  

Congress president Rahul Gandhi on Monday slammed the government on Monday over Reserve Bank of India Governor Urjit Patel’s resignation, calling it the ‘continuation of the BJP, RSS agenda’’. What is happening that the government is getting desperate, RBI governor is not able to function?”, Gandhi said talking to reporters after the Opposition meet in Delhi. This is the result …

RBI governor Urjit Patel resigns as rift with govt widens
6 years, 1 month ago

RBI governor Urjit Patel resigns as rift with govt widens

Live Mint  

Urjit Patel resigned as governor of India’s central bank amid growing differences with the government on addressing issues ranging from problems at the country’s lenders to utilization of capital reserves. The differences came out in the open when Deputy Governor Viral Acharya, in a hard-hitting speech in October, defended the central bank’s independence and sought more freedom in supervising state-run …

RBI governor Urjit Patel resigns amid messy face-off with govt
6 years, 1 month ago

RBI governor Urjit Patel resigns amid messy face-off with govt

Live Mint  

Of immediate concern is the fallout of Patel’s departure, which came ahead of his tenure ending next September, on the financial markets, particularly with respect to the sentiments of foreign investors and rating agencies. Urjit Patel’s resignation dominated the social media discourse and opened up a fresh line of attack for the opposition, which alleged that the BJP-led National Democratic …

Government to run power play at next RBI board meeting on 14 December; tensions likely to re-surface
6 years, 1 month ago

Government to run power play at next RBI board meeting on 14 December; tensions likely to re-surface

Firstpost  

Like the government, most board members feel that RBI should be “more transparent and accountable” for its decisions Mumbai/ New Delhi: For all the cordiality on show at the end of Reserve Bank of India’s last board meeting, tensions could re-surface when it next gathers on 14 December as the government aims to ramp up pressure for changes in the …

Govt wants to discuss RBI ‘governance issues’ with it
6 years, 1 month ago

Govt wants to discuss RBI ‘governance issues’ with it

Hindustan Times  

The Centre wants to discuss changes to the Reserve Bank of India’s governance structure at a board meeting next month, including setting up some oversight panels, economic secretary Subhash Chandra Garg told a news channel. The proposals to discuss governance at the RBI’s December 14 board meeting may further inflame tensions between the finance ministry and central bank. Worsening tensions …

Government destroyed MSMEs, now wants RBI to revive it: Chidambaram
6 years, 1 month ago

Government destroyed MSMEs, now wants RBI to revive it: Chidambaram

The Quint  

New Delhi, Nov 21 Picking on Prime Minister Narendra Modi's remarks that demonetisation was a "bitter" medicine to get rid of black money, Congress leader P. Chidambaram on Wednesday said it destroyed the Micro, Small and Medium Enterprises and now the government wanted RBI to revive the sector. The former Finance Minister also took strong exception to remarks reported in …

Opinion | RBI vs govt: This truce is a defeat for central bank
6 years, 1 month ago

Opinion | RBI vs govt: This truce is a defeat for central bank

Live Mint  

Many of us will have breathed a sigh of relief as, after a marathon eight-hour meeting on Monday, it looked like India’s government and its central bank had finally made peace with each other after weeks of very public sniping. The RBI’s board, which contains several government nominees, agreed to set up a committee to examine the bank’s reserves, one …

It is ceasefire, not a truce between RBI and govt
6 years, 1 month ago

It is ceasefire, not a truce between RBI and govt

Live Mint  

Markets are considerably relieved that the unhealthy spat between the Reserve Bank of India and the government has been diffused after a nine-hour board meet on Monday. The Indian rupee rose and bonds gained, an indication that the absence of a raid on the central bank’s balance sheet was welcomed. What was feared to end in a possible exit of …

Govt, RBI step back from the brink, signal uneasy truce
6 years, 1 month ago

Govt, RBI step back from the brink, signal uneasy truce

Live Mint  

Mumbai/New Delhi: In the end, expectations of an escalation of the confrontation were belied. The issue of transfer of excess RBI reserves to the central government has been referred to an expert committee, the membership and terms of reference of which would be finalized jointly by the government and RBI, the central bank said in a statement. Fixing the economic …

RBI board decisions: MSME loan restructuring scheme in the works
6 years, 1 month ago

RBI board decisions: MSME loan restructuring scheme in the works

Live Mint  

New Delhi: The Reserve Bank of India will consider a scheme for restructuring of stressed assets of micro, small and medium enterprises with loans of up to ₹ 25 crore on the advice of its board which met on Monday. However, the MSME loan restructuring scheme will be subject to conditions that are necessary for “ensuring financial stability”, RBI said …

RBI board meet today: Amid tiff with government, central bank likely to debate liquidity crisis
6 years, 1 month ago

RBI board meet today: Amid tiff with government, central bank likely to debate liquidity crisis

Firstpost  

The RBI board is also expected to discuss issues related to making relaxations to its Prompt Corrective Action framework to clean up the balance sheet of banks burdened with NPAs. Mumbai: The RBI’s crucial board meeting on Monday is expected to take up the liquidity crisis that initially triggered a tiff between the government and the central bank, according to …

Money matters: Big day for RBI, Centre ties
6 years, 1 month ago

Money matters: Big day for RBI, Centre ties

Deccan Chronicle  

New Delhi: All eyes will be on the RBI board meeting on Monday in Mumbai to see how the intense public battle erupted out between the Narendra Modi government and the central bank plays out. Earlier this month, economic affairs secretary Subhash Chandra Garg had said that the government has not asked the RBI to transfer '3.6 lakh crore to …

Government, RBI must work together, end turf war
6 years, 1 month ago

Government, RBI must work together, end turf war

Deccan Chronicle  

The ostentatious turf battle between the Union finance ministry and the Reserve Bank of India is not the real issue. As India still reels under the socialist module of controlling economic activities, which the present government perpetuates, the public sector banks are pushed and prodded to finance government schemes, whether it be infrastructure projects, agriculture loans and loan waivers, start-up …

RBI vs govt: At 19 November board meet, S Gurumurthy’s economic theories and other pain points await Urjit Patel
6 years, 1 month ago

RBI vs govt: At 19 November board meet, S Gurumurthy’s economic theories and other pain points await Urjit Patel

Firstpost  

Battle lines are drawn and fireworks are likely at the central bank’s board meet scheduled for 19 November. The 18-member central board of the RBI has five members from the central bank including the governor and the rest are government nominees. The signals are clear from the recent statements of Swaminathan Gurumurthy, the RBI’s board member who was recently appointed …

RBI vs Government Row: An Open Letter to RBI Governor Urjit Patel
6 years, 2 months ago

RBI vs Government Row: An Open Letter to RBI Governor Urjit Patel

The Quint  

The fall of the Rupee’s value and the market’s performance recently is not new to you. As the deputy governor, you managed the Urjit Patel Committee and braved through the crisis. Recently, you were served a show cause notice from the Supreme Court of India for not abiding by its order to disclose the list of wilful defaulters of loans …

Govt to continue pressing Reserve Bank of India for relaxing norms, funds to boost lending
6 years, 2 months ago

Govt to continue pressing Reserve Bank of India for relaxing norms, funds to boost lending

Firstpost  

The reports of rift between the central bank and the government surfaced last month following which the finance ministry reportedly started discussion with the RBI under the never-used before Section 7 of the RBI Act. New Delhi: Keeping up the heat on the Reserve Bank of India, the government will continue to press the central bank to relax norms to …

RBI autonomy: Bimal Jalan says it’s central bank’s job to implement govt policy, governor should quit if differences cannot be resolved
6 years, 2 months ago

RBI autonomy: Bimal Jalan says it’s central bank’s job to implement govt policy, governor should quit if differences cannot be resolved

Firstpost  

The sharply depreciating rupee amidst rising global oil prices and the massive foreign funds outflow from the capital market are not crises If there are irreconcilable differences of opinion between the government and the regulator, then ‘whoever is heading the agency should step down,’ said Bimal Jalan, former governor to RBI to Mint. The sharply depreciating rupee amidst rising global …

Finance Ministry baits RBI afresh, two days after declaring truce
6 years, 2 months ago

Finance Ministry baits RBI afresh, two days after declaring truce

Live Mint  

New Delhi: Two days after declaring a truce with the Reserve Bank of India, the ministry of finance has baited the central bank again, pointing out that the financial markets remain resilient and there are no signs of the wrath of the market. Garg’s comments are seen as a response to a speech by RBI deputy governor Viral Acharya last …

RBI-govt spat: International Monetary Fund against interference that compromises central bank's independence
6 years, 2 months ago

RBI-govt spat: International Monetary Fund against interference that compromises central bank's independence

Firstpost  

The standoff was in relation to RBI’s handling of weak public sector banks, tight liquidity in the market and ways of resolving bad loans in the power sector. I’ve said this before standing here that we support clear lines of responsibility and accountability… And, international best practice is that there should be no government or industry interference that compromises the …

The cast of characters in the Govt vs RBI fight
6 years, 2 months ago

The cast of characters in the Govt vs RBI fight

Live Mint  

A day after the two sides publicly and bitterly crossed each other, the Reserve Bank of India and the union government took a step back on Wednesday. Here’s a look at the key personalities involved in the public spat: Urjit Patel, governor of the Reserve Bank of India RBI governor Urjit Patel’s silence is also his biggest weapon: he has …

RBI autonomy row: Govt cites never-used powers of issuing directions for resolving issues with central bank
6 years, 2 months ago

RBI autonomy row: Govt cites never-used powers of issuing directions for resolving issues with central bank

Firstpost  

Finance ministry and RBI are said to have differed on the central bank’s handling of weak public sector banks, tight liquidity in the market and ways of resolving bad loans in the power sector. Section 7 of the RBI Act empowers the government to issue directions to the central bank, after consultation with RBI Governor, on issues that it considers …

Govt vs RBI: Arun Jaitley, Urjit Patel settle for an uneasy truce, for now
6 years, 2 months ago

Govt vs RBI: Arun Jaitley, Urjit Patel settle for an uneasy truce, for now

Live Mint  

New Delhi/Mumbai: A day after the two sides publicly and bitterly crossed each other, the Reserve Bank of India and the union government took a step back on Wednesday. Conceding that differences can arise, the carefully-worded finance ministry release admonished RBI, saying, “ government of India has never made public the subject matter of those consultations. The first letter was …

Why RBI is at loggerheads with the government
6 years, 2 months ago

Why RBI is at loggerheads with the government

Live Mint  

A growing rift between India’s central bank and the government has been many months in the making. In the latest move, the Reserve Bank of India made its disagreement with authorities public in a hard-hitting speech by Deputy Governor Viral Acharya on Friday — which he said had the backing of Governor Urjit Patel — defending the central bank’s independence. …

Govt very upset with Reserve Bank of India for making rift public, holds Urjit Patel responsible
6 years, 2 months ago

Govt very upset with Reserve Bank of India for making rift public, holds Urjit Patel responsible

Firstpost  

Government officials have recently called for the Reserve Bank of India to relax its lending restrictions on some banks New Delhi: Government officials are very upset with the Reserve Bank of India for publicly talking about a rift with the government, fearing it could tarnish the country’s image among investors, senior officials said on Monday. On Friday night, the RBI …

Opinion | Don’t cry for India? A central bank’s lament
6 years, 2 months ago

Opinion | Don’t cry for India? A central bank’s lament

Live Mint  

Long-simmering discord between the Indian central bank and the government is turning into a very public brawl. Knowing that similar pressures exist in India, investors would be right to ask if Acharya’s boss – Governor Urjit Patel – is also contemplating a showdown with Prime Minister Narendra Modi’s government. Last week’s stormy and inconclusive RBI board meeting, where the government’s …

Viral Acharya is right; RBI should be left alone to do its job, not coerced for political reasons
6 years, 2 months ago

Viral Acharya is right; RBI should be left alone to do its job, not coerced for political reasons

Firstpost  

The most recent debate has been on the independence of the central bank. Next, on the issue of control of public sector banks, the central bank is unable to do what it has done for private banks especially on governance issues as this is where the problem is founded. Also, in the past, when some private banks were down under, …

Opinion | Undercutting the RBI will not end well
6 years, 2 months ago

Opinion | Undercutting the RBI will not end well

Live Mint  

Time was when capital markets put a premium on “strong men”. Things must have got serious because RBI deputy governor Viral Acharya used two successive public speeches to communicate RBI’s discomfort with the government’s repeated attempts to undermine the central bank. It is true that the RBI’s ledger has many red marks and there are many things that the central …

RBI nominee on PSU boards create illusion of regulatory control: Raghuram Rajan
6 years, 4 months ago

RBI nominee on PSU boards create illusion of regulatory control: Raghuram Rajan

Live Mint  

New Delhi: Former Reserve Bank of India governor Raghuram Rajan is not in favour of having an RBI nominee on the boards of public sector banks, saying it creates an “illusion that the regulator is in control”. Its nominees on bank boards have no commercial lending experience and can only try and make sure that processes are followed,” he said …

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