The crucial Reserve Bank of India (RBI) board meeting is underway. The Opposition has been strident in its criticism of the government's 'interference' with the RBI Board.
Congress leader Rahul Gandhi has tweeted that the government and Prime Minister Narendra Modi's 'coterie of cronies' are out to destroy every institution they can get their hands on.
Mr Modi and his coterie of cronies, continue to destroy every institution they can get their hands on. Today, through his puppets at the #RBIBoardMeet he will attempt to destroy the RBI. I hope Mr Patel and his team have a spine and show him his place.
— Rahul Gandhi (@RahulGandhi) November 19, 2018
At the meeting underway, governor Urjit 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 to PTI. The central board, headed by the RBI Governor, is expected to discuss issues mentioned in the agenda circulated to the board members in advance.
Off-agenda items can also be raised in the meeting, with the chair's permission. The RBI's central board currently has 18 members, though the provision is that it can go up to 21. The members include Governor Urjit Patel and his four deputies as 'full-time official directors', while the rest 13 have been nominated by the government, including two Finance Ministry officials—Economic Affairs Secretary and Financial Services Secretary.
Earlier, senior Congress leader and former finance minister P Chidambaram tweeted that the government is determined to ‘capture’ RBI in order to gain control over its Rs 9 lakh crore reserves.
"Government is determined to 'capture' RBI in order to gain control over the reserves. The other so-called disagreements are only a smokescreen (sic)," he said on microblogging site Twitter. Chidambaram said, "Nowhere in the world is the central bank a board-managed company. To suggest that private business persons will direct the governor is a preposterous idea."
Nowhere in the world is the central bank a Board-managed Company. To suggest that private business persons will direct the Governor is a preposterous idea — P. Chidambaram (@PChidambaram_IN) November 17, 2018
"November 19 will be a day of reckoning for central bank independence and the Indian economy," he tweeted.
Sources said the government and Reserve Bank of India (RBI) are looking to reach at an agreeable solution with respect to relaxation of the Prompt Corrective Action (PCA) framework and easing of lending norms for the MSME sector.
If not in this board meeting, the issue of relaxation of PCA framework would reach a resolution in the next few weeks, they added.
Updated Date: Nov 19, 2018 12:34 PM