Arun Jaitley says government does not need RBI funds in next six months, Centre keen to gain control over bank reserves

Critics accuse the government of trying to undermine the RBI's authority, but Arun Jaitley said the BJP-led government respected the institution’s independence.

Reuters November 24, 2018 15:10:59 IST
Arun Jaitley says government does not need RBI funds in next six months, Centre keen to gain control over bank reserves

Mumbai: India does not need money from the Reserve Bank of India (RBI) in the next six months, Union finance minister Arun Jaitley said in a TV interview on Friday, rejecting opposition charges the government was seeking access to the bank’s reserves to fund schemes ahead of the 2019 general election.

Arun Jaitley says government does not need RBI funds in next six months Centre keen to gain control over bank reserves

File photo of Union minister Arun Jaitley. PTI

“I don’t need money in the next six months,” Jaitley told Times Now.

Critics accuse the government of trying to undermine the central bank’s authority, but Jaitley said his government respected the institution’s independence. “We respect the autonomy (of the RBI) but, at the same time, if some sectors are starved of liquidity or credit, we will flag those issues. We do so with the RBI.”

The Congress has accused Prime Minister Narendra Modi’s government of eyeing the cash reserves held by the RBI. “Government is determined to ‘capture’ RBI in order to gain control over the reserves,” P Chidambaram, a former finance minister and a top Congress leader tweeted last week.

New Delhi has been pushing for access to RBI’s surplus reserves prompting the central bank’s board to form an expert panel to look into whether its cash pool is adequate.

The board whose members include government nominees, in a meeting last week, advised the RBI to aid small businesses and give bankers more time to step up capital norms to encourage lending and stimulate the economy ahead of next year’s election.

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