Urjit Patel to submit written answers to questions raised by MPs, says demonetisation had transient impact on economy

New Delhi: RBI Governor Urjit Patel Tuesday committed to a parliamentary committee to give in writing his views on some of the controversial issues, which may include the government citing never-used powers to get the central bank on the discussion table, said sources. Patel, who appeared before the 31-member Parliamentary Standing Committee on Finance, said the economy would get a boost from oil prices cooling off from four-year highs and said fundamentals were “robust”, they said. The RBI governor also told the Members of Parliament that credit growth was 15 percent and the impact of November 2016 demonetisation has a transient impact on the economy. Patel was earlier scheduled to appear before the panel on 12 November. [caption id=“attachment_3938005” align=“alignleft” width=“380”] File image of RBI Governor Urjit Patel. AFP[/caption] He, however, did not answer specific questions on the government invoking Section 7 of the RBI Act, NPAs, the autonomy of the central bank and other contentious issues, sources said. Sources said Patel made a presentation about the state of the economy as well about the world economy to the committee and several members asked questions. His views on the economy were “optimistic”. “He stayed clear of controversial questions like government invoking special powers, instead he gave intelligent replies without saying anything,” they said. Members also asked questions on the implementation of the Basel III capital adequacy norms for banks. To this, a source said the Governor replied that adherence to the global norms was India’s commitment to G-20 nations. Another source said that as there were a large number of questions, the Governor was asked to file written replies in 10-15 days. The RBI governor appeared before the panel days after the RBI’s face-off with the finance ministry over issues ranging from the appropriate size of reserves to be maintained by the central bank to easing of lending norms for small and medium enterprises. Former prime minister Manmohan Singh is also a member of the committee headed by senior Congress leader and former Union minister M Veerappa Moily. India’s banking system, particularly state-owned banks, are grappling with huge bad loans. Recently, there has been a liquidity crisis for the important NBFC sector following re-payment default by IL&FS.