RBI capital transfer: Bimal Jalan panel likely to get extension to finalise report; govt to replace its representative after SC Garg's transfer
The government and the RBI, during the tenure of the previous governor Urjit Patel, had been at loggerheads over the surplus capital with the central bank.
The Bimal Jalan committee, which is looking into the size of capital reserves that the RBI should hold, will have one more meeting before finalising its report to be submitted to the apex bank by month-end
The minister in a written reply to the Rajya Sabha said, "No, sir. Government has not asked funds from its surplus reserves to meet fiscal deficit."
"If the reserve is used for deficit financing that would amount to raiding RBI and I would be extremely dissatisfied and disappointed with it," Arvind Subramanian said
Unlike the last meet, which lasted for 10 hours, Friday's meeting is likely to get over by afternoon.
"We expect the proposed committee on the RBI's economic capital framework (ECF) to identify Rs 1-3 trillion which is 0.5-1.6 percent of GDP as excess capital," analysts at Bank of America Merrill Lynch said in a note on Monday.
RBI Board meet: Govt wants to capture central bank to gain control of its Rs 9 lakh cr reserves, says P Chidambaram
In a series of tweets, the former finance minister also claimed that the government and the Reserve Bank of India (RBI) was heading towards a “confrontation” in the Monday's board meeting of the bank.
RBI complains too much; its role has been better defined, powers expanded over four years of Narendra Modi govt
Historically, finance ministers have sought to accelerate growth and boost credit, while RBI governors have prioritised stability and control of inflation.