The Government asks RBI to bend barrels on 11 banks run by states with debt issues, capital suitability.
How Prime Minister of Narendra Modi is the Prime Minister of the Indian Bank (RBI) to heat the heat; Advocacy ahead of a general election next year, it is uploaded to & # 39; A headquarters that is much more powerful, according to government officials and board members. Now covered by government nominees that can be counted to support the administration, the board is modified from having an independent advisory role for a group which will affect policy change. Some economists are afraid of threatening independence to their bank.
Two members told Reuters that the government's pressures for easier loan policies could be quite clear at Monday's meeting. The first one that was held from a deep level of increase between the RBI and the growing government knew the public.
With the election due before May, and voters involved in weak income and have enough work created, Bharatiya Janata Party (PMP) is a & # 39 ; PM Modi management for economic and economic stimulus; saw the position of the RBI hunter as a barrier, government officials and BJP supporters said.
The government has been stressing the RBI based on Mumbai and the Urjit Patel Governor to accept a range of requests that may help to strengthen demand. They include making it easier and cheaper for small businesses to borrow, and # 39; Reduced lending hill on 11 state banks with debt and capital sufficiency problems, and providing more liquid leakage lenders.
They also want the government to have access to additional resources that the RBI has built – money that could be used for administrative populist programs which include raising rural wages, fuel subsidies and bar to buy at a minimum price.
The RBI hit back by questioning whether the government wanted to eliminate devolution and its; warned that this happened in Argentina in 2010.
The Ministry of Finance and RBI speakers refused to comment on this story.
In the past week there are indications that it has been stopped as some government officials said they did not want Patel to retire and would allow some of start the issues on the road.
But at the same time, PM Modi supporters have made it clear that they want a significant change in policy, and a chief executive chief executive said some of the government's supporters were on the board take the light green light at a Monday meeting.
Building on its & # 39; This is the new member of the S Gurumurthy board, who is a director of PM Modi. He is a censusist and column-holder who was the convener of Swadeshi Jagaran Manch, the economic shield of the Hindu nationalist Rashtriya Swayamsevak Sangh, who is the beginning of his BJP.
In a speech last week, Gurumurthy was circulated at the RBI constraints on a bank loan, saying he was damaging the economy.
"It's a bank-driven economy … in a bank-led economy if you block the banks, you limit the economy, you are "Restrict the flow of assets to the economy," he said.
Under the RBI Act of colony, the government can provide its banking after consulting with the government. That law establishes the RBI board priority to "perform all actions and actions" according to government guidelines. It also empowers Delhi to refuse any board – a & # 39; including government.
In practice, the government has never used to use those sections of the activity. For many decades, RBI governments have heard active freedom, although they are traditionally working closely with the government, an officer said directly to such consultations.
The board has no direct effect on interest rates policy. In 2016, PM Modi agreed to establish a financial policy committee to set up balances according to which the country was to meet the inflation target. It is made up of three RBI officers and three members elected by government, with the RBI ruler receiving their & # 39; a party vote.
PM Modi's supporters are confidently embedded members on board the RBI with a "national view" to & # 39; cutting interest rates, overcoming funding money to the government and his / her; allows bank loan pits.
The RBI board seeks greater accountability from the regulator, Ashwani Mahajan, who is convener of Swadeshi Jagaran Manch, said.
"Now the RBI will work more accurately and look at the nation's specific needs," he said. As long as PM Modi has re-elected, the RBI board could ensure that banks "have a larger role in the social and economic transformation of the country," he said.
A PACKED A & # 39; BOARDS
PM Modi aboard RBI to complete in the last few months with people with links to his / her partner and economists; leaving more government impact on the RBI.
In August, Gurumurthy and Satish Marathe, who was a banker in a student's flag, was named to launch her, board.
After lasting, the government appointed the bureaucratic office, Revathy Iyer and Sachin Chaturvedi, a headquartered tank based in Delhi, and his / her. removing Nachiket Mor, who was close to the RBI's officers.
It means there are 18 current members, five and a. coming from the government bureaucracy, and two finance ministry officers, and two of them have two close links to Modi and the BJP. Four, and the other five, have four business backgrounds, Patel and its four deputy rulers.
Previously, the RBI would usually recommend new members; board or government should at least consult the government before nominating members. Under PM Modi, almost no consultation was carried out, one formerly officially stated one about the application process.
In sign of the marathon meeting that could be in the database, running the last board meeting on October 23 for eight hours, and # 39; including just two out of 12 business items, one member said. The rest will be discussed on Monday, this person said.