Why #RBIvsGovt is a viral storm in a tea cup
6 years, 2 months ago

Why #RBIvsGovt is a viral storm in a tea cup

Live Mint  

New Delhi: Central bank deputy governor Viral Acharya’s speech on the issues between the Reserve Bank of India and the government has brought the rift between the two into public domain more visibly than perhaps ever before. A question arising from Acharya’s speech is whether a discussion by board members in the RBI board constitutes interference in the job of the RBI and reduces its independence? Now, at this stage, after publicly airing differences between the management and other board members, if the government uses Section 7 of The Reserve Bank of India Act, 1934, to give directions to the RBI on regulations, it is not a step towards improving the functioning of RBI governance. The exception, also mentioned in Acharya’s speech, was FSLRC’s proposal for making RBI an inflation targeting central bank. Then RBI governor Raghuram Rajan’s speech titled, Financial Sector Legislative Reforms Committee Report - what to do and when?

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History of this topic

Reimagining how the Reserve Bank functions
2 years ago

Reimagining how the Reserve Bank functions

Hindustan Times  

The Supreme Court judgment on demonetisation last week appears to have reignited the debate on the relationship between the Reserve Bank of India and the Union government. The parliamentary committee wants to ensure that financial regulators such as RBI are adequately prepared to support India’s growth journey, the chair of the committee, Jayant Sinha, said in an interview to Mint …

Opinion | An easy surrender of the country’s economic defences
5 years, 4 months ago

Opinion | An easy surrender of the country’s economic defences

Live Mint  

The global economy is admittedly in a strange place and even the usually reliable experts are struggling to decode an evolving economy and the central bank’s place in it. To address this new normal, we are conducting a public review of our monetary policy strategy, tools, and communications.” Coincidentally, the same day Lawrence Summers and Anna Stansbury published a Project …

RBI Financial Stability Report: There is good news and bad news, but where is the plan of action?
5 years, 6 months ago

RBI Financial Stability Report: There is good news and bad news, but where is the plan of action?

Firstpost  

The Financial Stability Report is a very important document on the financial sector as it analyses threadbare the overall state of the various segments as well as highlights the risk-related issues that have been identified which can cause potential challenges. The FSR is happy with the state of the banking system as the gross non performing asset ratio is 9.3 …

RBI-govt spat: Uneasy calm prevails as both sides seek to cool down temperatures, but rift far from over
6 years, 1 month ago

RBI-govt spat: Uneasy calm prevails as both sides seek to cool down temperatures, but rift far from over

Firstpost  

At the RBI board meeting on that day, neither side actually blinked on the issue of transferring reserves from the RBI to the government’s accounts In the Cold War era, they called it détente : but 19 November was not for the first time that there was an easing in the strained relations between the Reserve Bank of India and …

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 …

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 …

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 …

India’s liquidity crisis set to rock RBI board meeting
6 years, 2 months ago

India’s liquidity crisis set to rock RBI board meeting

Live Mint  

New Delhi: The Reserve Bank of India’s board meeting on 19 November is expected to be a stormy affair in the backdrop of the ongoing tussle between the government and the central bank, people aware of the development said, adding that some members are likely to raise issues concerning capital framework, management of surplus and liquidity measures for MSMEs. Government …

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. …

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 …

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