As originally reported by TOI on November 2, the RBI stops away from making decisions at its & # 39; Board meeting in October 23 public, although agreed to them. At a Monday meeting, sources have been identified, the two government representatives on the board will require RBI to make the agreed agreement on how to make it. Reducing credit flow into small, medium and medium-sized enterprises (MSMEs), a fastened rapid correction function (PCA) framework for weak banks, and aligning capital rules for Indian lenders according to international standards instead of making them more hard. The government will see these as an essential step to ensure more loans.
"The government wants its meeting to start from the place it finished last year," said a senior government official for TOI. The Center also plans to use the platform to seek steps to reduce the weight of pressure on non-banking financial companies (NBFCs), who have been involved in The fundraising problems since IL & FS started to & # 39; keep back on debt.
The important meeting that comes into a backup that wants to use section 7 of the RBI that has ever been used, and allowing the Center to provide guidance, to & # 39; look closely after the case between the RBI and the financial ministry was thrown into the last month's opening (the first TOI statement). Just before, in a speech, RBI deputy, Viral Acharya, described Argentina's example, and suggested that banking independence could be moderately "destructive". Many, including RBI sympathy, and & # 39; Believe that Acharya's report was very aggressive.
The statement came after a long anti-character board meeting, where the government's request to deal with a number of its concerns was not addressed. As reported by TOI on 31st October, the government also had consultations with the RBI on three cases, in which it was considered a substitute for the inclusion of Section 7.. It is seen to be the real piece of information taken about it; and that the financial ministry and the RBI have not been the same page on a number of issues for over a year.
For a main bank, government weapons, Section 7, have emerged as a red line. People who knew how to think about the RBI said it would improve between the central bank and the government and deepen the crisis if Monday board meeting was held in the light of Section 7.
However, the government's attack may be estimated by the fact that the government and two of its candidates have a & # 39; Choosing to leave if the behaviors are too tough and create an international idea.
RBI representatives are expected to be willing to Their 18-member board does not need some pressure on some areas, but they have more to do with confidence in confidence among lenders and the ineffective ability of small businesses. The central bank is likely to have a problem of disruption by going to # 39; shows that large debts of short-term NBFC debts have been held in November without any significant equity.
The government, however, is unclear with the steps that the regulator has made so far and believe that the pressure on financial companies is in place; terminating their jobs and affecting a credit stream to critical areas such as construction and small businesses.
Stocks suggest that issues related to the flow of credit to MSMEs and problems with NBFCs should be left to RBI. In terms of a conservation theme, they suggest that a large part of the body is predictable. It is a matter that was debated since 1986, when the financial secretary S Venkitaramanan was involved in a bitter battle with RN Malhotra, the RBI regulator to seek a higher division of the rest.
The government has not said that it is an aspiration that the central bank should be on the board – and has come in for criticism. According to an old banker, compared to the US Piece board, the board of the RBI includes people from different types of life. They have been including Heads of companies who are very enthusiastic, who should not be allowed to decide on governance.
Although the Center can not use Section 7 anxious, it wants the panel to have a larger role because it considers that the central pressures are unsuitable to the needs of the economy and is not willing communication with stakeholders or even a senior government.
If the Center is to give a guide decision to its & # 39; Central Bank, there is no scope for any academic debate and the RBI needed to implement New Delhi's ambitions without going to its conclusions. decision-making or evaluating its & # 39; impact.
A viewer's banker said that the government should not use the extract already used. "It was not used when there was any war, famine or emergency. There is no reason to use it now," he said. Many see this as a separation of personality. Stocks that could not be resolved such as a new capital suitability framework in a two-hour meeting, but a panel of experts who need to make up their past wisdom on the subject and suggestions on propose changes.