What’s the Beef... Err Problem Between Modi Government and RBI?
6 years, 2 months ago

What’s the Beef... Err Problem Between Modi Government and RBI?

The Quint  

Provisioning on a One-Day Default The government and several bankers see this requirement as unusually strict and impractical. But for a system which has been so lax and prone to “ever-greening abuse” for decades, perhaps the RBI was justified in using a “shock and awe” tactic to force compliance. Also, the government’s entreaty to exempt power companies from these provisions is contrived and lazy; reforming the power sector is the government’s problem, not the RBI’s. Recall how Prime Minister Narendra Modi was vocal about “phone calls from UPA ministers” that had “destroyed PSBs”. Why is Modi not giving RBI unambiguous control of PSBs, in much the same way that private banks have been put under the regulator?

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History of this topic

Indian bankers aren’t always frank about RBI regulations, are they?
2 months ago

Indian bankers aren’t always frank about RBI regulations, are they?

Live Mint  

The ‘world’s banker’ Jamie Dimon, CEO of JPMorgan Chase, speaks his mind even if it means taking swipes at US regulators. Kamath and HDFC’s chairman Deepak Parekh would air their views publicly on important banking issues, including what the Reserve bank of India should be doing on interest rates. Cut to now, it’s extremely rare for bankers to talk about …

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good
2 years, 4 months ago

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good

ABP News  

A big bang approach to privatisation of state-run banks may do more harm than good, according to the latest Reserve Bank of India bulletin released on Thursday. The RBI’s paper showed some of the major reasons that public sector banks can serve the country better than private banks include better financial inclusion, better credit system, and better efficiency of the …

The design of RBI limits its abilities
4 years, 9 months ago

The design of RBI limits its abilities

Deccan Chronicle  

The Reserve Bank of India, India’s central bank, performs vital functions that are essential for keeping the Indian economy in robust health. Recently, the RBI has found itself lurching from one crisis to another as financial institutions such as non-banking financial corporations, cooperative banks and commercial banks collapsed like dominos one after the other. The RBI draws its powers from …

PSB recapitalisation: Why Narendra Modi govt must look at outright privatisation of state-run banks rather than experimenting with taxpayers' money
5 years, 6 months ago

PSB recapitalisation: Why Narendra Modi govt must look at outright privatisation of state-run banks rather than experimenting with taxpayers' money

Firstpost  

There are reports indicating that the Union Government is contemplating recapitalising the public sector banks with a capital of Rs 30,000 crores. Thus, to a layman, this situation should give rise to the question as to why then is the government continuously infusing taxpayers hard-earned money into the banking system. The government controls more than two-thirds of the banking assets …

Govt says not considering giving more powers to RBI to deal with state-owned banks
6 years ago

Govt says not considering giving more powers to RBI to deal with state-owned banks

Firstpost  

The powers of the RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks, including public sector banks, said Minister of State for Finance Shiv Pratap Shukla in the Rajya Sabha New Delhi: The government is not currently considering any proposal to give more powers to the Reserve Bank of India to deal with …

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. …

The real reason behind RBI-government spat over PCA framework
6 years, 1 month ago

The real reason behind RBI-government spat over PCA framework

Live Mint  

The Reserve Bank of India’s prompt corrective action rules state that banks which breach the third threshold for any parameter are ripe candidates for a merger with another bank. Ltd have identified four banks that breach the third threshold under various parameters based on data from latest September quarter results. IDBI Bank Ltd, the weakest lender, has breached the third …

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 …

Opinion | RBI’s independence needs to be protected
6 years, 2 months ago

Opinion | RBI’s independence needs to be protected

Live Mint  

The relationship between the government and the Reserve Bank of India used to be cooperative and productive, but has vitiated over the past decade. Public airing of differences must be eschewed and the government must take steps to strengthen RBI’s independence. He also warned that governments that do not respect central bank independence will sooner or later incur the wrath …

RBI vs Narendra Modi government: Public spat won’t help, but India’s best bet is not to mess with its central bank
6 years, 2 months ago

RBI vs Narendra Modi government: Public spat won’t help, but India’s best bet is not to mess with its central bank

Firstpost  

Almost every RBI governor, be it Y V Reddy or D Subbarao, have pitched for central bank autonomy in public forums inviting the wrath of the government of the day. The turf war between the Reserve Bank of India and the Narendra Modi government on the subject of the central bank’s autonomy is out in the open and is turning …

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