Appearing before a parliamentary panel on Tuesday, 27 November, RBI Governor Urjit Patel 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, PTI reported, citing sources.
However, Patel reportedly committed to the 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.
- The RBI Governor told MPs that credit growth was 15 percent and the November 2016 demonetisation had a transient impact on the economy
- The Governor appeared before the panel days after the RBI’s face-off with the Finance Ministry
- Some differences were ironed out during the RBI board meeting on 19 November
- The CIC held a hearing on the show cause notice issued to RBI governor Urjit Patel on Friday, 16 November
RBI Governor to Submit Written Answers to Questions Raised by MPs
RBI Governor Urjit Patel on Tuesday, 27 November, 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 November 2016 demonetisation had a transient impact on the economy.
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.”Sources, as quoted by PTI
Members also asked questions about 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.
(PTI)
RBI Governor Urjit Patel Appears Before Parliamentary Panel
RBI Governor Urjit Patel on Tuesday appeared before a parliamentary panel to brief them on demonetisation and the NPA situation in the public sector banks, among other issues, PTI quoted sources as saying.
Patel was earlier scheduled to appear before the panel on 12 November.
Source said issues related to November 2016 demonetisation of Rs 500 and Rs 1000 notes, reforms in the RBI, stressed assets in the banking system, and state of the economy, were listed as agenda items of the 31-member Parliamentary Standing Committee on Finance.
The RBI Governor appeared before the panel days after the central bank's face-off with the Finance Ministry over issues ranging from appropriate size of reserves to be maintained by RBI to easing of lending norms for small and medium enterprises.
Former Prime Minister Manmohan Singh is a member of the committee headed by senior Congress leader and former Union Minister M Veerappa Moily.
RBI Can Transfer Rs 1-tln of Excess Reserves to Govt: Report
The Reserve Bank has "more than adequate" reserves and that it can transfer over Rs 1 trillion to the government after a specially constituted panel identifies the "excess capital", says a report.
An RBI board meeting had last Monday, 19 November, decided to form a committee, which is likely to be announced later this week.
"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 per cent of GDP as excess capital," analysts at Bank of America Merrill Lynch said in a note Monday.
The brokerage report said as per its stress tests, the central bank can transfer Rs 1 trillion to the government if the transfer is limited to passing excess contingency reserve and can go up to Rs 3 trillion if the total capital is included.
Expert Committee to Examine ECF of RBI Soon, Say Sources
The committee proposed by the RBI Board for examining the Economic Capital Framework (ECF) to determine the appropriate levels of reserve the central bank ought to hold will be constituted soon, official source said Tuesday, 20 November.
After a day-long meeting, the Central Board of the RBI had decided on an expert committee to look into the ECF.
It was also agreed that the membership and terms of reference of the panel will be jointly determined by the government and the Reserve Bank of India.