RBI concludes day-long board meeting

RBI concludes day-long board meeting

Courtesy : Agencies27/11/2018 12:44

The government has been pressing the RBI to reduce capital ratios for banks, which would speed up loans to small businesses in remote parts of the country, a crucial vote bank for Prime Minister Narendra Modi.

 The Reserve Bank of India (RBI) concluded a critical day-long board meeting, said a source familiar with the situation. It wasn’t immediately clear whether it had come to any conclusions in a dispute with the government over easing liquidity for the financial sector and increasing credit to small businesses.

The government has been pressing the RBI to reduce capital ratios for banks, which would speed up loans to small businesses in remote parts of the country, a crucial vote bank for Prime Minister Narendra Modi.

There are five key state elections in the next few weeks and a general election due by May.

News agency PTI Sunday reported, the finance ministry nominees and some independent directors, in the meeting, were expected to take on governor Urjit Patel and his team over issues ranging from MSME credit to the central bank’s reserves, though both sides are in favour of reaching a common ground.

 While there have been reports and demands from some quarters for the governor to step down, sources said Patel is unlikely to yield under pressure and will rather mount a strong defence of the central bank’s policies regarding stringent NPA recognition norms as well as measures taken to ease credit supply to MSMEs.

Patel and his four deputies, who all are members of the RBI’s 18-member central board, will present a united front, while a few independent directors too are expected to support the central bank’s mission to clean up bank balance sheets, sources said.

 

 

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